Saudi court approves detained tycoon’s bankruptcy filing

March 11, 2019 00:00:00

A file photo showing people gathering as Saudi authorities auction vehicles and other possessions belonging to billionaire Maan al-Sanea and his company in Dammam, Saudi Arabia recently — Reuters

DUBAI, Mar 10 (Reuters): A Saudi court has approved an application by detained and indebted billionaire Maan al-Sanea and his company, Saad, to have their case resolved through the kingdom's new bankruptcy law, the company's financial adviser and two sources familiar with the matter told the news agency.

The ruling in February could provide a resolution to one of the kingdom's longest-running debt sagas.

Saad, with interests from banking to healthcare, defaulted together with another conglomerate, Ahmad Hamad al-Gosaibi and Brothers (AHAB), in 2009, leaving banks with unpaid debts of about $22 billion

Creditors have spent the past 10 years pursuing Saad, which is based in the city of Khobar in Saudi Arabia's Eastern Province, for claims that some observers familiar with the case last year estimated at between $11 billion and $16 billion.

"This is a landmark step for all stakeholders since 2009," said Ahmed Ismail, the 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 per cent of total debt, some of whom advised filing under the new bankruptcy law," he said.

"Given that it is more or less aligned with regional and international commercial law practices, the probability of its success is much higher."

A commercial court in Dammam last month approved an application for financial reorganization under the terms of the Saudi bankruptcy law and appointed an independent trustee to oversee the process. Such decisions are not made public.

The trustee, Saleh A. Al-Naim, sent a notice to creditors - seen by Reuters - announcing the beginning of the financial reorganization 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 Arab world's largest economy more attractive to investors.