DUBAI, Oct 3 (Businesshala) – A Saudi court on Sunday issued a final order on the restructuring of the Algosabi family group AHAB, formally ending one of Saudi Arabia’s biggest and longest debt disputes Gaya.
AHAB filed for financial restructuring in 2019 under the framework of Saudi Arabia’s bankruptcy law, beginning last year to make the kingdom more investor-friendly.
The Dammam commercial court on Sunday issued a final ratification order for AHAB’s reorganization, which is no longer appellate, AHAB’s chief restructuring officer Simon Charlton told Businesshala.
“The company will now take steps to remove the restrictions on assets and start liquidation of assets to be able to make distributions to its approved creditors,” he said.
AHAB’s creditors include local, regional and international banks. About a third of the firm’s debt has been traded by the trading desks of banks and hedge funds for years.
Under the settlement, AHAB’s creditors are expected to receive about 26 cents on the dollar for debt claims totaling 27.5 billion riyals (about $7.3 billion), Charlton said.
Settlement assets include over 800 million riyals in cash, a portfolio of publicly traded shares worth approximately 3.7 billion riyals, and real estate assets in Saudi Arabia.
The company will retain its core operating assets and plans to rebuild those businesses and restructure the group, possibly by increasing external financing, Charlton said, adding that funding plans were in the early stages.
Creditors are chasing AHAB and Saad Group, a Saudi conglomerate owned by tycoon Mann al-Saneya, since they defaulted on nearly $22 billion in combined debt in 2009.
Married to the Algosabi family, Algosaibi and Sania have a bitter dispute over who is to blame for the companies’ 2009 collapse.
“Ahab will continue to pursue his claims in the Saad estate and against Al Sania, which he holds responsible,” Charlton said.
AHAB was one of the first companies to apply for restructuring under the new Saudi bankruptcy law.
Prior to the law, modern bankruptcy law did not exist in Saudi Arabia, meaning that the main options for defaults were liquidation or cash injection.