KUWAIT CITY: Kuwait has ordered a freeze in dealings with two major Saudi conglomerates which owe Kuwaiti banks more than $750 million, a newspaper said yesterday.
Al-Rai, citing unnamed banking sources, said almost all Kuwaiti banks were involved in providing credit to billionaire Maan Al-Sanea’s Saad Group and to Algosaibi, one of Saudi Arabia’s oldest family companies.
Their exposure is expected to hit the banks’ financial results this year, Al-Rai said, adding that the Kuwait Central Bank has ordered a total freeze on all financial dealings with the two Saudi groups.
Last week, the Saudi central bank froze the bank accounts of Sanea, one of the Kingdom’s most powerful tycoons with interests in finance and construction, because of problems at Bahrain-based The International Banking Corp.
TIBC, which is controlled by the Algosaibi group and which Sanea also has reported links to, has defaulted on a significant level of debt, according to international ratings agency Standard and Poor’s.
The agency last month downgraded its credit ratings on Saad entities and withdrew its ratings saying it had insufficient information.
Moody’s Investors Service last week downgraded the credit ratings of three units of Sanea’s Saad group which said it was restructuring its debts after being caught in a “credit squeeze.” Sanea, who ranked number 62 on Forbes magazine’s billionaires list in March with a fortune estimated at $7 billion, has made large investments in international financial institutions, including HSBC, Citigroup and the Bank of China.
