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Reuters reported that one of Saudi Arabia’s longest-running debt disputes is about to be resolved, after more than 12 years of controversy between the Ahmed Hamad Al-Gosaibi & Brothers group and its creditors.
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For his part, Simon Charlton, Chief Restructuring Officer, interim CEO of the “Ahmed Hamad Al-Gosaibi & Brothers” group, explained that “a debt restructuring proposal was submitted this week to the Dammam Commercial Court, after approval by the creditors’ committee, “noting that” the proposal requires creditors to receive 7.25 billion riyals (approximately $ 1.93 billion) in settlement, which is equivalent to approximately 26% of total approved receivables, amounting to 27.5 billion riyals ($ 7.33 billion), “because it is expected that a bankruptcy judge will determine this within 60 days until the vote of the creditors, and the dividends could arrive shortly time after.
Simon Charlton said: “Obviously this is in the best interest of the creditors. It offers a much higher return than a hostile liquidation. I am confident that the creditors will see this and have a successful vote. I hope we will begin distributions later in the year. “
In details of the discussion of this dispute and its merits, Reuters revealed that the Ahmed Hamad Al-Gosaibi and Brothers group and the Saad group, a Saudi group owned by prominent businessman Maan Al-Sanea, have been stalking since they failed to pay a combined debt of around $ 22 billion in 2009. A heated dispute has arisen 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 Algosaibi & Brothers group creditors committee includes local, regional and international banks – Charlton announced that about a third of its debt has been traded for years by trading desks affiliated with banks and hedge funds .
According to “Reuters”, among 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.
It should be noted that the owners of the group “Ahmed Hamad Algosaibi and Brothers” had filed a request for financial restructuring in 2019 under the bankruptcy law in Saudi Arabia, which had been enacted the previous year to make the kingdom more attractive to investors, whereas before the new law there was no legislation A discussion of the bankruptcy issue in Saudi Arabia, which means that the two main options for defaulters are liquidation or l injection of funds.
Source: “Reuters”
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