Court holds first hearing on Al Gosaibi dispute under new bankruptcy law

Saudi Arabia’s commercial court held its first hearing session on a debt settlement for the conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB) under the new bankruptcy law, Al Arabiya TV has reported, citing Al Gosaibi Group agent, Eyad Reda.

“The settlement plan relies on an offer approved by non-Saudi creditors. It includes disposal of the company’s cash and unutilized land plots, while maintaining businesses and 5,000 jobs for three to five years,” Reda added.

Saudi banks have a share of less than 40 percent in total debts, as two of them sold their debts or approved the settlement, while two or three other banks rejected the offer.

Among other options is the liquidation of the company’s businesses and declaring its bankruptcy, said Reda.

In 2009, AHAB defaulted on about SAR 22 billion of debt. Over the years, Saudi banks and those with links to the Kingdom have refused to join other creditors in the debt settlement deal, claiming “the terms on offer were not satisfactory”.

Eleven banks, majority owned by Saudi Arabian shareholders, have exposure to AHAB, of the total of 94 creditor institutions.