DUBAI, United Arab Emirates (AP) — A Saudi company that owes billions of dollars will pay banks back $1.9 billion after an agreement was reached with creditors following more than decade of efforts, according to a news report on Wednesday.
The website of the Abu Dhabi-based The National newspaper, quoting executives at business conglomerate Ahmad Hamad Algosaibi and Brothers, reported that creditors voted to approve the company’s financial restructuring proposal last week.
Under the deal, the conglomerate will pay lenders some $1.9 billion in settlements through a mix of cash, traded shares, real estate and proceeds from the sale of one of the company’s investments. The amount proposed is equal to about 26% of the $7.3 billion the company owes in debt claims.
In 2016, company CEO and chief restructuring officer Simon Charlton told The Associated Press that under the deal they were seeking, debts would be repaid “25 to 30 cents” on the dollar, with a payout of just under $2 billion.
Although the Algosaibi family had negotiated settlements with international creditors years back, the settlement remained in limbo with Saudi banks declining to participate, according to The National.
A new Saudi bankruptcy law introduced in 2018 made the deal possible because it was supported by a majority of creditors rather than all, the company’s general counsel, Brett Walter was quoted by The National. The AP could not immediately reach Walter.
The Saudi conglomerate made a series of bad loans to some 110 international banks and institutions, but as financial markets tightened in 2009 during the Great Recession, the company began defaulting on those loans. It quickly spiraled, becoming one of the largest corporate defaults in Mideast history.
The firm’s founding al-Gosaibi family and Maan al-Sanea, who married into the family and worked in the company, have traded accusations over who’s to blame. Their saga played out in lawsuits around the world.
Copyright © 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.
