New Saudi bankruptcy law may resolve $22 billion Saad debt saga

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Vehicles belonging to billionaire Maan al-Sanea and his company are auctioned off by Saudi authorities in Dammam, Saudi Arabia, on March 18, 2018. (REUTERS/Zuhair Al-Traifi/File Photo)
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Maan Al-Sanea
Updated 10 March 2019
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New Saudi bankruptcy law may resolve $22 billion Saad debt saga

  • Saad Group, with interests from banking to health care, defaulted in 2009, leaving banks with unpaid debts of about $22 billion
  • Saudi Arabia’s bankruptcy law is part of the Saudi government’s efforts to make the economy more attractive to investors

ALKHOBAR, Saudi Arabia: A Saudi court has approved an application by billionaire Maan Al-Sanea and his company, Saad, to have their case resolved through the Kingdom’s new bankruptcy law.

The ruling could provide a resolution to one of Saudi Arabia’s longest-running debt sagas.

Saad, with interests from banking to health care, defaulted together with another conglomerate, Ahmad Hamad Al-Gosaibi and Brothers, in 2009, leaving banks with unpaid debts of about $22 billion.

Creditors have spent the past 10 years pursuing Saad, which is based in Alkhobar, for claims estimated at between $11 billion and $16 billion.

“This is a landmark step for all stakeholders since 2009,” said Ahmed Ismail, chief executive of Reemas Consultants, which was appointed as Saad’s financial adviser in late 2017 to find a settlement with creditors.

“The regional and international creditors represent more than 85 percent of total debt, some of whom advised filing under the new bankruptcy law. Given that it is more or less aligned with regional and international commercial law practices, the probability of its success is much higher.”

The commercial court in Dammam last month approved an application for financial reorganisation under the terms of the Saudi bankruptcy law and appointed an independent trustee to oversee the process. 

The trustee, Saleh Al-Naim, sent a notice to creditors announcing the beginning of the financial reorganisation proceedings, and asked them to submit their claims within 90 days.

Saad’s filing is among the first to be accepted under Saudi Arabia’s bankruptcy law, which came into effect last August and is part of the Saudi government’s efforts to make the economy more attractive to investors.

Until last year the main options for debt defaults were liquidation or cash injections. The law provides more options and regulates procedures such as settlements and liquidation.


Saudi Crown Prince Mohammed bin Salman begins Asia trip

Updated 42 min 24 sec ago
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Saudi Crown Prince Mohammed bin Salman begins Asia trip

JEDDAH: Saudi Arabia’s Crown Prince Mohammed bin Salman began an official trip to South Korea and Japan on Tuesday.
The visit comes after an invitation from South Korean President Moon Jae-in and based on the directives of King Salman, the royal court said in a statement carried by state news agency SPA.
He will meet with the president and a number of officials to discuss bilateral relations and issues of common interest.
The crown prince will also head to Japan after Korea to head the Kingdom’s delegation at the G20 summit in Osaka on Friday and Saturday.
During his visit to Japan, the crown prince is expected to meet with several heads of states and senior officials, among them Russian President Vladimir Putin, according to the Kremlin.