Ahmad Hamad Algosaibi & Brothers signed a deal with a committee representing creditor banks to restructure about $6 billion of debt, taking it a step closer to ending a seven-year impasse over the Middle East’s biggest default.
The agreement with the five-member steering committee formally commits Algosaibi and the banks “to support the implementation of the agreed settlement terms,” the Saudi Arabian company said in an emailed statement on Monday.
Algosaibi and billionaire Maan al-Sanea’s Saad Group, two family holding companies related by marital ties, defaulted on at least $15.7 billion in 2009 as the global economic crisis froze credit markets and asset prices slumped. The company made an improved offer to banks last year, guaranteeing they would recover at least 40 per cent on the debt. Algosaibi plans to pay creditors using a share portfolio, real estate assets and a minority stake in an operating business.
About 90 per cent of creditors by number and 56 per cent by value have signed the deal, and the remaining banks will be asked to sign the agreement in the next few weeks, the company said in the statement. The restructuring plan also needs the approval of a three-judge panel at a court in Khobar, in eastern Saudi Arabia, which has been appointed to oversee the claims against Algosaibi.
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