DUBAI: A Saudi court on Sunday issued a final order on the restructuring of Al-Gosaibi Group, bringing an official end to one of the kingdom’s largest and longest-running debt disputes.
The group had requested financial reorganization in 2019 under the Saudi bankruptcy law, which was introduced the previous year, to increase the kingdom’s attractiveness to investors.
Simon Charlton, chief restructuring official, told Reuters that the Dammam Commercial Court on Sunday issued the final approval order for the group’s reorganization so that it can no longer be appealed.
He added, “The company will now take steps to begin lifting restrictions on assets and start monetizing the assets to be able to provide distributions to its approved creditors.”
The group’s creditors include local, regional and international banks. For years, a third of the group’s debt has been traded between banks and hedge funds.
Under the settlement, Charlton said, the group’s creditors are expected to receive about 26 cents for every dollar of its 27.5 billion riyal (about $7.3 billion) debt recovery claims.
The settlement assets include cash liquidity of more than 800 million riyals, a portfolio of traded shares worth about 3.7 billion riyals, and real estate assets in Saudi Arabia.
Charlton said the company will retain its core operating assets and intends to rebuild these activities and the group after its restructuring, possibly through the arrangement of external financing, adding that the financing plans are still at an early stage.
Creditors have been hunting Algosaibi Group and Saad Group, owned by businessman Maan Al-Sanea, since they defaulted on debt obligations totaling about $22 billion in 2009.
Al-Gosaibi and Al-Sanea, a cousin of the Al-Gosaibi family, are locked in a bitter dispute over who is responsible for the two companies’ collapse in 2009.
Charlton said the Al-Gosaibi group “will continue to claim Al-Sanea’s claim to the Saad Group’s property” and that it still holds him responsible for its crisis.
Algosaibi Group was one of the first companies to file for restructuring under the new Saudi bankruptcy law.