DUBAI, July 8 (Reuters) – After more than 12 years of back and forth between the Algosaibi family’s conglomerate AHAB and its creditors, one of Saudi Arabia’s largest debt disputes is set to finally reach a resolution.
A debt restructuring proposal was submitted to the Dammam commercial court this week after approval from a creditor committee, Simon Charlton, chief restructuring officer and acting chief executive of AHAB told Reuters on Thursday.
The proposal would see creditors receive 7.25 billion riyals ($1.93 billion) in settlements, corresponding to about 26% of total approved debt claims worth 27.5 billion riyals ($7.33 billion), he said.
A bankruptcy judge is expected to indicate within 60 days a date for a creditor vote, and distributions could follow soon.
“This is clearly in the best interest of creditors, it delivers a much higher return than a hostile liquidation and I am confident creditors will see that and will give a successful vote, and I am hoping we’ll start distributions later this year,” Charlton said.
Creditors have been pursuing AHAB and Saad Group, a Saudi conglomerate owned by tycoon Maan al-Sanea, since they defaulted on about $22 billion in combined debt in 2009.
The Algosaibis and Sanea – who married into the Algosaibi family – have been locked in a bitter dispute over who was to blame for the 2009 collapse of the companies.
AHAB’s creditor committee includes local, regional, and international banks.
About one third of its debt has been traded for years by banks’ trading desks and hedge funds, Charlton said.
Of the 7.25 billion riyals in settlements, 5.2 billion riyals will come from company assets and about 2 billion riyals from the owners.
AHAB filed for a financial restructuring in 2019 under the framework of Saudi Arabia’s bankruptcy law, introduced the previous year to make the kingdom more investor friendly.
Before the new law, modern bankruptcy legislation did not exist in Saudi Arabia, meaning the main options for defaults were liquidation or cash injections. ($1 = 3.7506 riyals) (Reporting by Davide Barbuscia; Editing by Elaine Hardcastle)