Algosaibi family seeks rebuilding after $ 7.5 billion debt deal

(Bloomberg) – The Algosaibi family will retain most of the operating activities of their business under a deal with creditors and will eventually seek to restore them by returning to the credit market, according to Simon Charlton, director of restructuring of the Saudi conglomerate.

“It is clear that we have to go through the restructuring, there are various steps that we have to take to meet our obligations under the agreement,” Charlton said in an interview with Bloomberg Television on Sunday.

“But we are looking at where it would make the most sense and at what level of return to the market in the hope that it will strengthen the companies and allow them to become more involved and to regain their former glory,” he said. -he declares.

Ahmad Hamad Algosaibi & Brothers Co., which has grappled with legal battles and negotiations with creditors over more than $ 7.5 billion in debt since 2009, has seen its proposal to restructure the bonds ratified by a Saudi court – in the first great test for the new kingdom of bankruptcy law kingdom,

Order from Dammam Commercial Court in Saudi Arabia’s Eastern Province will lift various asset freezes and allow AHAB, as the company is known, to move forward with a plan repayment to creditors of about 26% of the value of their claims through a mix of cash, stocks and Saudi real estate.

The company was also locked in a legal dispute with the Saad Group, which is owned by Maan Al-Sanea and also defaulted on billions of dollars in 2009 as the global economic crisis froze credit markets and prices of assets were collapsing. The Saad Group is also in bankruptcy proceedings in Saudi Arabia and “probably” two or three years behind the AHAB, according to Charlton, who said he was not directly involved in the process.

BNP Paribas SA and Citigroup Inc. were among the global banks most exposed to AHAB. Since its failure, many banks have sold their exposure to the company to hedge funds.

Charlton also said:

The remodeled AHAB will contain most of the operating manufacturing activities, such as shipping, logistics, hospitality, retail. capital financing, we will be able to rebuild these businesses ”The“ core ”assets that contribute to the settlement are the most liquid holdings such as large positions in public stocks and a large real estate portfolio The most important result for long-term investors is “that there are mechanisms in place that will allow you to have an orderly exit if things don’t work out” Among creditors, all but one Saudi bank participated in the last vote

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