Saudi Arabia’s longest debt dispute nears 7.25 billion riyal settlement, equivalent to a quarter of claims

After more than 12 years of feuds between the Ahmed Hamad Al-Gosaibi group and his brothers and creditors, one of Saudi Arabia’s oldest debt disputes is finally on the verge of being resolved.
According to “Reuters,” Simon Charlton, head of restructuring and acting CEO of Ahmed Hamad Al-Gosaibi and Brothers Group, said a debt restructuring proposal was submitted to the Dammam commercial court this week after approval by a creditors’ committee.
He added that the proposal provides for creditors to receive 7.25 billion riyals ($ 1.93 billion) in settlement, which is equivalent to about 26% of the total approved claims amounting to 27.5 billion riyals. ($ 7.33 billion).
A bankruptcy judge is expected to set a date for the creditors’ vote within 60 days, and distributions can come after that within a short period of time.
“Obviously this is in the best interest of the creditors, it offers a much higher return than an unfriendly liquidation and I’m sure the creditors will see it and have a successful vote, and I hope we start the distributions more. late in the year, ”Charlton said.
Creditors of Ahmed Hamad Algosaibi & Brothers Group and Saad Group, a Saudi conglomerate owned by businessman Maan Al-Sanea, have been suing their creditors since they defaulted on a combined $ 22 billion debt in 2009.
A heated dispute erupted between family members Al-Gosaibi and Al-Sanea, who is married to the family, over who was responsible for the collapse of the two companies in 2009.
The Ahmed Hamad Al-Gosaibi & Brothers group creditors committee includes local, regional and international banks.
About a third of its debt has been traded for years by the trading desks of banks and hedge funds, Charlton said.
Of the settlements amounting to 7.25 billion riyals, 5.2 billion riyals will come from the assets of the company and about two billion from the owners.
The Ahmed Hamad Al-Gosaibi & Brothers group filed for financial restructuring in 2019 under Saudi bankruptcy law, which was enacted the previous year to make the kingdom more attractive to investors.