ALKHOBAR, Saudi Arabia: A Saudi court has approved a request by billionaire Maan Al-Sanea and his company, Saad, to have their case resolved under the Kingdom’s new bankruptcy law.
The decision could provide a solution to one of Saudi Arabia’s longest debt sagas.
Saad, with interests ranging from banking to health care, defaulted with another conglomerate, Ahmad Hamad Al-Gosaibi and Brothers, in 2009, leaving the banks with around $22 billion in unpaid debts.
Creditors have spent the past 10 years suing Saad, who is based in Alkhobar, for claims estimated at between $11 billion and $16 billion.
“This is a historic step for all stakeholders since 2009,” said Ahmed Ismail, managing director of Reemas Consultants, who was appointed financial adviser to Saad in late 2017 to find a settlement with creditors.
“Regional and international creditors account for more than 85% of the total debt, some of whom have advised filing under the new bankruptcy law. Since it is more or less aligned with regional and international commercial law practices, the likelihood of its success is much higher.
The Dammam Commercial Court last month approved a request for financial reorganization under Saudi bankruptcy law and appointed an independent trustee to oversee the process.
The trustee, Saleh Al-Naim, sent a notice to creditors announcing the start of the financial reorganization proceedings and asked them to submit their claims within 90 days.
Saad’s case is one of 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 effort to make the economy more attractive to investors.
Until last year, the main options in the event of default were liquidation or cash injections. The law provides more options and regulates procedures such as settlements and liquidation.
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