Today, Sunday, a Saudi court issued a final order regarding the restructuring of Al-Gosaibi Group, bringing an official end to one of the largest and longest-running debt disputes in the kingdom.
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.
“The Dammam Commercial Court issued today, Sunday, the final approval order to reorganize the group so that it can no longer be appealed,” Simon Charlton, chief restructuring official, told Reuters.
He added that “the company will now take steps to start deregulating 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, 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, Charlton said.
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.
“The company will retain the assets of its main operations, and it intends to rebuild these activities and the group after its restructuring, possibly through the provision of external financing,” Charlton said, 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 relative of the Al-Gosaibi family, are locked in a bitter dispute over who is responsible for the collapse of the two companies 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.