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

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 minister hails ‘special relationship’ with Japan

Updated 49 min 28 sec ago

Saudi minister hails ‘special relationship’ with Japan

  • “We share common values,” said Majid Al-Qasabi

TOKYO: Saudi Arabia has a “special relationship” with Japan, which is “reliable strategic partner and friend” of the Kingdom, the Saudi Minister for Commerce and Investment Majid Al-Qasabi said on Monday.

The minister was speaking at the launch in Tokyo of the Japanese-language online edition of Arab News, in the latest stage of its global expansion. The event came on the eve of Tuesday’s ceremonial enthronement of Emperor Naruhito in the Japanese capital. “This is a great opportunity, a moment in history,” Al-Qasabi said.

The news website, published in Japanese and English, will focus on enabling the exchange of information between Japan and the Arab world in business, current affairs, and arts and culture. “It will be good to have news in Japanese so many Japanese can read about the Arab world,” Japan’s Defense Minister Taro Kono said at the launch.

Common values

“We share common values, we have a high respect for the elders and we think that the family is very important … to me we are friends and I think we need to work together.

“In order to do that we need to know what people in the Middle East are actually thinking, what is happening on a daily basis, and we haven’t got the source for that — but now Arab News is in Japan.

“This is a very good means to exchange information between the Middle East and Japan, so I am very much looking forward to it.”