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The Algosaibi family retains most of its operational activity under an agreement with its creditors and will ultimately seek to win it back by returning to the credit market, according to Simon Charlton, director of restructuring of the Saudi conglomerate.
“It is clear that we need to restructure, and there are many steps we need to take to meet our obligations under the agreement,” Charlton said in an interview with Bloomberg TV on Sunday.
“But we are looking at where and at what level we will make the most sense to return to the credit market in the hope that this will strengthen the subsidiaries and allow them to participate more and regain their former glory”, he said. -he adds.
Ahmed Hamad Algosaibi & Bros. Co., which has been locked in legal battles and negotiations with creditors with more than $ 7.5 billion in debt since 2009, has submitted its Saudi court-sanctioned bond restructuring proposal – the first test of the new kingdom of the realm of bankruptcy law.
The order issued by the Dammam Commercial Court in Saudi Arabia’s Eastern Province will allow the lifting of the various assets and allow Al-Gosaibi to move forward with a payment plan of around 26 % of the value of their claims to creditors through a mix of cash, stocks and real estate assets.
The company also entered a legal dispute with the Saad Group, owned by Maan Al-Sanea, and also defaulted on billions of dollars in repayments in 2009 as the global economic crisis froze credit markets and brought down credit markets. asset prices.
The Saad group is also on the verge of bankruptcy, “probably” two or three years late, according to Charlton, who said he was not directly involved in the process.
Saudi BNP Paribas and Citigroup were among the global banks most exposed to the Algosaibi group, and since the default, several banks have sold their exposure to the company to hedge funds.
Charlton said the restructuring of the Algosaibi Group will contain most of the operating manufacturing activities, such as shipping, logistics, hospitality and retail.
“Our hope is that as the business gets out of this and has access to credit and re-enters the credit markets, it will be able to raise working capital and we can rebuild these businesses.”
He noted that the “core” assets that are contributing to the settlement are the most liquid holdings such as large public equity positions and a large real estate portfolio.
He explained that the most important outcome for long-term investors is knowing that “there are mechanisms in place that allow creditors to have an orderly exit if things don’t work out.”
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