Thousands flock to auction of vehicles owned by Saudi tycoon

An auction for vehicles and other possessions belonging to billionaire Maan Al-Sanea and his company in Dammam. (Reuters)
Updated 20 March 2018
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Thousands flock to auction of vehicles owned by Saudi tycoon

DAMMAM: Thousands of people attended the first day of an auction of vehicles owned by indebted Saudi Arabian tycoon Maan Al-Sanea and his company, a sale which officials said will go toward repaying about SR18 billion ($4.8 billion) owed to creditors.
Authorities said the auction, the subject of huge interest in the Eastern Province where his business is based, reflects their focus on improving corporate governance and by extension Crown Prince Mohammed bin Salman’s commitment to economic reforms.
Creditors ranging from unpaid workers to local and international banks hope the process, which at a later stage will include sale of bigger assets such as property, will lead to repayment of at least part of their debt.
The businessman, ranked in 2007 by Forbes as one of the world’s 100 richest people, was detained by authorities late last year for unpaid debt dating back to 2009 when his company, Saad Group, defaulted on payments in what was Saudi Arabia’s biggest financial meltdown.
His case is separate from the dozens of Saudi businessmen and prominent figures who have been held in a corruption crackdown.
A three-judge tribunal established in 2016 to resolve Saad’s debt dispute late last year appointed a consortium called Etqaan Alliance to liquidate assets owned by the billionaire.
The first phase of the auction was launched this week, with around 900 vehicles including lorries, buses, diggers, forklift trucks and golf carts owned by Saad Group going under the hammer.
Later stages of the process will include other parts of his business empire and personal wealth including property — estimated at around SR10.3 billion, as well as machinery, ceramics and furniture, in auctions in the Eastern Province, Riyadh, Jeddah and Yanbu, said Abdulaziz Al-Rashid, head of Etqaan Alliance, a coalition of companies including two real estate companies, accountants and lawyers.
After a series of TV, online and billboard adverts run by Etqaan Alliance in recent weeks anticipation about the auction has been building. Roads around the auction site were jammed on Sunday afternoon as people queued to enter the dusty land plot where the event was taking place.
“Can you believe this man was once a billionaire and today he came to the ground level and has to start from scratch?” said a buyer of a forklift truck, giving his first name as Nasser.
Prospective buyers were mainly businessmen from local construction companies and other contractors.
“This auction gives a clear message that the court is serious to carry out the liquidation process of all assets to repay creditors,” said Al-Rashid. “We expect to finalize liquidation of all assets during this year.”
Money raised from the first phase of the auction, expected to be completed by the end of April, will go toward repaying creditors owed around SR18 billion, he said.
Some of the workers who hope to get paid through the liquidation process were among those attending the event.
Outside the court process, advisers to Saad Group recently asked some bank creditors to meet in Dubai in a bid to try to reach a consensual debt settlement on SR16 billion of claims, Reuters reported last week.
The advisers were seeking a deal before Saudi authorities make progress in the auction process.


Saudi Arabia’s economy in a ‘sweet spot’, says US bank

Updated 21 min 54 sec ago
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Saudi Arabia’s economy in a ‘sweet spot’, says US bank

  • Bank of America Merrill Lynch Global Research: “With a more entrenched current account surplus possible this year, FX reserves could increase.”
  • “Reforms are likely to broadly proceed, even at these levels of oil prices, although spending may increase further above baseline expectations.”

LONDON: The Saudi Arabian economy is in a “sweet spot”, with higher oil prices allowing the Kingdom to boost spending while not having a significant impact on the country’s fiscal balance, according to Bank of America Merrill Lynch Global Research.

“Our meetings on Saudi Arabia comfort us in our view that the economy is in a sweet spot. Higher oil prices are allowing the focus on boosting activity not to materially impact fiscal balances,” the note said, published following the IMF and World Bank Spring meetings held in Washington DC this month.

“With a more entrenched current account surplus possible this year, FX reserves could increase this year,” the note said.

The bank forecasts the country will continue to push forward with its reform process regardless of the rising price of oil. Many of Saudi Arabia’s reforms are part of its Vision 2030 that aims to diversify the country’s economy away from its reliance on oil.

Brent oil reached a three-and-a-half year high on 19 April, hitting $74.74 a barrel.

“Reforms are likely to broadly proceed, even at these levels of oil prices, although spending may increase further above baseline expectations,” the note said.

The bank was also upbeat about Egypt’s economic prospects, noting that the country’s “macro stablization” is continuing and that its reform program, which includes cutting fuel subsidies and reforming the tax system, remains “intact”.

“Authorities are on track to achieve a small 0.2 percent of GDP primary surplus this fiscal year. The target is to bring the primary surplus to 2 percent of GDP next fiscal year, and maintain it there going forward,” it said.