Saudi Algosaibi family seeks lifting freeze on assets after court ends 12-year debt dispute

Saudi Algosaibi family seeks lifting freeze on assets after court ends 12-year debt dispute
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Updated 03 October 2021

Saudi Algosaibi family seeks lifting freeze on assets after court ends 12-year debt dispute

Saudi Algosaibi family seeks lifting freeze on assets after court ends 12-year debt dispute

RIYADH: A court in Saudi Arabia on Sunday issued a final order on the restructuring of the Saudi conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB) closing down the largest family debt case in the history of Saudi Arabia.

Samah Algosaibi, an executive board member, told Arab News that the conglomerate will now get the final orders uploaded to the online judicial systems (Najiz portal) so that restrictions on the group’s assets are lifted and “terms of the proposal can be fulfilled.” 

The ruling is the first of its kind since the introduction of the new bankruptcy laws, she said it would be difficult to predict the timeframe for the implementation of the procedures.

Algosaibi said: "Through our efforts in recovering assets, we have managed to build up a significant cash balance that can be distributed almost immediately once restrictions are lifted.”

She added: “The publicly quoted shares ought to be capable of being liquidated quickly, so we remain hopeful of making significant distributions before the end of the calendar year.

Real estate will take more time, so the parties have agreed to set up a regulated fund to manage the real estate carefully and maximize recoveries from it. In addition, the real estate fund will be owned by creditors, so the title in the assets will transfer to creditors quickly," Algosaibi said.

Through our efforts in recovering assets, we have managed to build up a significant cash balance that can be distributed almost immediately once restrictions are lifted.

Samah Algosaibi, executive board member, AHAB.

The Dammam commercial court on Sunday issued the final ratification order for the AHAB restructuring, which is now unappealable, Simon Charlton, chief restructuring officer at AHAB, told Reuters.

“The company will now take steps to begin lifting the restrictions over assets and begin liquidating assets to be able to make distributions to its approved creditors,” he said.

AHAB had reached settlement under Saudi Arabia’s new bankruptcy law, which allows creditors to vote on the debt settlement plan. 

Saudi Arabia’s bankruptcy law, which came into effect in 2019, is an important step toward making the Kingdom more investor-friendly, offering a legal framework to struggling companies seeking to restructure debt following the 2009 global financial crisis. 

The company will now take steps to begin lifting the restrictions over assets and begin liquidating assets to be able to make distributions to its approved creditors

Simon Charlton, chief restructuring officer at AHAB

Before the introduction of the law, modern bankruptcy legislation did not exist in Saudi Arabia, meaning the main options for defaults were liquidation or cash injections.

Creditors had been pursuing AHAB and Saad Group, another Saudi conglomerate, since they defaulted on about $22 billion in combined debt in 2009.

AHAB’s creditors include local, regional and international banks. About a third of the firm’s debt has been traded for years by banks’ trading desks and hedge funds.

Under the settlement, AHAB’s creditors are expected to receive about 26 cents on the dollar for debt claims totaling SR27.5 billion riyals (about $7.3 billion), Charlton said.

The settlement assets include over SR800 million in cash, a portfolio of publicly traded shares worth about SR3.7 billion, and real estate assets in Saudi Arabia.

The company will retain its core operating assets and plans to rebuild those businesses and the restructured group, possibly by raising external financing, Charlton said, adding that funding plans were at an early stage.


Singapore lists first SPAC as Asia investors warm up to blank check firms

Singapore lists first SPAC as Asia investors warm up to blank check firms
Image: Shutterstock
Updated 5 sec ago

Singapore lists first SPAC as Asia investors warm up to blank check firms

Singapore lists first SPAC as Asia investors warm up to blank check firms
  • The listing of Vertex Venture's SPAC also marks the first major debut of such vehicles in Asia

 A small blank-check firm backed by state investor Temasek made its Singapore debut on Thursday, marking the first such local listing as Singapore steps up a drive to emerge as a key venue for listings of this type.


This came four months after Singapore Exchange allowed special purpose acquisition companies or shell firms to list, easing proposed rules in response to market feedback.


The listing of Vertex Venture's SPAC also marks the first major debut of such vehicles in Asia since the frenzy seen in the United States in early 2021 prior to regulatory changes there.


"As the first SPAC in Singapore, we had to tread through difficult and unchartered waters," Chua Kee Lock, CEO of Vertex Venture, a Temasek subsidiary, told company executives, bankers and lawyers at a listing ceremony.


With an eye on sectors such as cyber security and fintech, Vertex Technology Acquisition Corp raised S$200 million ($148 million), with 13 cornerstone investors such as Temasek-linked entities and a fund operated by Dymon Asia, contributing 55 percent.


The SPAC last traded little changed from its offer price of S$5 per unit after being heavily oversubscribed.


Vertex Venture, the sponsor, which manages $5.1 billion of assets with a portfolio of 200-plus companies, has up to two years to find a target.


"The point is to attract high-growth technology companies which conventionally would not have considered this market and now they have sponsors who can take over the risk also," Chua told Reuters this week.


SPACs raise money in public offerings, put it in a trust and then aim to merge with a private company and take it public, typically offering shorter listing timeframes and strong valuations.


Another SPAC, Pegasus Asia, backed by European asset manager Tikehau Capital and a holding firm of LVMH's chairman, among others, raised S$150 million and plans to invest in tech-enabled sectors. It lists on Friday.


A S$150 million SPAC sponsored by Southeast Asian industrial and technology buyout fund Novo Tellus Capital Partners, got investment from a Temasek unit and others. It lists next week.


Southeast Asia is seeing a boom in start-up funding as investors bet on post-pandemic technology plays.


SGX is offering a regulatory framework similar to that in the United States, including allowing participation of retail investors but also requires sponsors to invest in SPACs.


Analysts say risks include SPACs overvaluing companies and not finding ideal targets.


'HERE TO STAY'
"While there will always be gyrations in the market, we believe the SPAC framework is here to stay and complements the traditional IPO route," Mohamed Nasser Ismail, SGX's head of equity capital markets, told Reuters.


By focusing on sponsors' track records and ensuring their compulsory investment in SPACs, SGX is optimistic about SPAC listings.


While considered one of Asia's leading financial and business hubs, Singapore has not captured big IPOs. Last year, fundraising on SGX halved to $565 million, a six-year low, with just eight listings, Refinitiv data shows.


Hong Kong, home to large Chinese listings, is also allowing SPAC listings from this year but bars participation from retail investors.

Eng-Kwok Seat Moey, DBS' head of capital markets, said SPACs are being accepted by many investors as an alternative to gain access to start-ups which typically tap private equity markets.


"Several Singaporean and regional companies in high-growth, high-tech sectors will be mature for listing on public markets in the coming years," she said, adding that these would emerge as business combination targets for SPACs listed on SGX.


Credit Suisse and DBS are the joint issue managers on the Vertex SPAC, and joint global coordinators, with Morgan Stanley. 


Evergrande's offshore shareholders say to seriously consider enforcement actions

Evergrande's offshore shareholders say to seriously consider enforcement actions
Getty Images
Updated 7 min 22 sec ago

Evergrande's offshore shareholders say to seriously consider enforcement actions

Evergrande's offshore shareholders say to seriously consider enforcement actions

An ad hoc offshore shareholder group of China Evergrande said on Thursday it has seen no substantive engagement from the firm with offshore creditors to formulate a viable restructuring plan, despite the firm's repeated assurances.


The group, represented by law firm Kirkland & Ellis and investment bank Moelis & Company, said in a statement it has no option but to seriously consider enforcement actions and it is prepared to take all necessary actions to defend its legal rights. 

 


Saudi stocks edge lower as earnings season kicks off: Opening bell

Saudi stocks edge lower as earnings season kicks off: Opening bell
Image: Shutterstock
Updated 11 min 8 sec ago

Saudi stocks edge lower as earnings season kicks off: Opening bell

Saudi stocks edge lower as earnings season kicks off: Opening bell
  • The Gulf’s largest miner, Saudi-listed Ma’aden hit its highest value since listing

RIYADH: Saudi stocks opened fractionally lower as investors brace themselves for earnings announcements.

As of 10:19 a.m. Saudi time, TASI edged down 0.2 percent to 12,238 points and the parallel Nomu market was flat at 26,155 points.

Shares in Yanbu National Petrochemical Co., known as Yansab, led the losses in early trading as it fell almost 2 percent despite posting a 126 percent jump in net profit in the fiscal year 2021.

The market was also weighed down by falls in some of the Kingdom’s major players, including oil giant Saudi Aramco, Al Rajhi Bank, and its largest lender Saudi National Bank all down in the range of 0.1 to 0.3 percent.

The Gulf’s largest miner, Saudi-listed Ma’aden hit its highest value since listing of SR95.5 ($25.5).

Al Moammar Information Systems Co., MIS, saw a 1.4 percent increase in its share price.

Earlier, MIS announced the launch of a system to provide cloud management solutions in Saudi Arabia, following a deal with BMC Software.

In energy trading, Brent crude reached $88.1 per barrel, and US WTI crude oil neared $87 per barrel as of 10:30 a.m. Saudi time.


India seeks 10m tons of overseas coal: NRG matters

India seeks 10m tons of overseas coal: NRG matters
Updated 24 min 37 sec ago

India seeks 10m tons of overseas coal: NRG matters

India seeks 10m tons of overseas coal: NRG matters

RIYADH: Despite the global pressure to move away from fossil fuels, South Africa and India are relying on coal to help fill gaps in the energy supply. On the other hand, the Commodity Hedge Fund index is seen benefiting from the energy transition.

Looking at the bigger picture:

  • Japan’s 2 trillion yen ($17.5 billion) green innovation fund created back in 2020, as well as the potential carbon tax, are not enough to bring the country to its carbon neutrality goals by 2050, Bloomberg reported. One possible solution is for the Asian country to consider a new form of sovereign debt as a source of funding in an attempt to pursue net zero goals.

Through a micro lens:

  • South African electricity public utility Eskom Holdings SOC Ltd. is to burn more coal than expected over the next year amid delays in a government program that aims to draw energy supply from private producers, Bloomberg reported. That said, the state owned firm anticipates 2 percent more energy generation from coal over the next year.
  • Indian state owned statutory corporation NTPC Ltd. sought bids for an accumulative amount of over 10 million tons of foreign coal to curb power shortages amid expected strong summer power demand, Bloomberg reported. As a result, coal imports will jump in spite of the policies in favor of local production. 
  • Germany’s electric utility company E.ON gained hundreds of thousands of customers across Europe as the rallying energy prices forced smaller competitors in the region to shut, Reuters reported. Despite the fact that this is just a small share of the firm’s 50 million customer base, it emphasizes how the surging costs are severely affecting retailers across the continent.
  • The Bridge Alternatives Commodity Hedge Fund Index jumped over 19 percent in 2021 as the energy transition unlocked several trading opportunities from crude oils to base metals, Bloomberg reported. The surge in trading opportunities is mainly attributed to the global shift towards renewable energy which increased demand for battery metals required for electric vehicle production.

 


Shares of Saudi mining firm Ma’aden hit highest value since listing

Shares of Saudi mining firm Ma’aden hit highest value since listing
Updated 29 sec ago

Shares of Saudi mining firm Ma’aden hit highest value since listing

Shares of Saudi mining firm Ma’aden hit highest value since listing

RIYADH: Shares of the Gulf’s largest mining firm, Saudi-listed Ma’aden, hit its highest value since listing at SR95.5 ($25.5).

The company's shares reached that level at 10:36 a.m. Saudi time on Thursday Jan. 20.

The firm, also known as the Saudi Arabian Mining Company, returned to profit last year, posting returns of SR3.1 billion ($826 million) in the first nine months 2021.

This was compared to a net loss of SR780 million in the same period in 2020, when the COVID-19 pandemic hit pushed industries to the wall. 

The recovery was due to higher average sales prices of all products except gold.