Saudi’s Algosaibi signs deal with banks to restructure $6bn debt

Takes it a step closer to ending a seven-year impasse over the Middle East’s biggest default.

Creditors to the indebted Al Gosaibi business family of Saudi Arabia have agreed to a “settlement support agreement” to implement the terms of a deal over its $6bn of debts.

The deal - known as a “lock-up” in the financial industry - is a significant step towards resolving one of the longest running business disputes in the Middle East.

Al Gosaibi found itself unable to repay its debts in 2009 when family businesses collapsed in a storm of accusations of fraud, theft and forgery against Maan Al Sanea, an estranged family member. Mr Al Sanea denies the allegations.

Ahmad Hamad Al Gosaibi & Brothers (AHAB), the family partnership, today announced the deal with members of the steering committee of creditors that represents more than 90 banks and other creditors. It will bind AHAB and creditors to the terms of a deal agreed last year at a meeting in Dubai.

AHAB said that 90 per cent of creditors by number and 56 per cent by value had agreed to the terms, which potentially allow then to recover around 50 per cent of their loans.

Members of the steering committee include Emirates NBD, Standard Chartered, Arab Banking Corporation of Bahrain, the French group BNP and the US hedge fund Fortress Investment. There are no Saudi banks, which are big AHAB creditors, represented on the committee.

AHAB, under chief executive Simon Charlton, will ask the court authorities in Al Khobar, its headquarters in the kingdom, to implement and administer the settlement, in the hope that Saudi creditors, owed about $2bn of the total, will also accept the deal.

In the Cayman Islands, AHAB is simultaneously fighting the biggest court case in the tax-haven’s history with a claim over $7.3bn of assets formerly owned by Mr Al Sanea. The result could affect the level of payout to AHAB creditors.

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Published: July 25, 2016 04:00 AM


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