Saudi Conglomerate’s $7.5 Billion Default Is Finally Settled

BNP Paribas SA and Citigroup Inc. are among global banks that are finally set to see some of their loans be at least partially repaid after getting caught up in one of Saudi Arabia’s biggest corporate defaults, Bloomberg News reported.In the first major test for the kingdom’s new bankruptcy law, Ahmad Hamad Algosaibi & Brothers Co., which has been locked in legal battles and negotiations with creditors over $7.5 billion of debt since 2009, had its proposal to restructure the obligations ratified by a Saudi court, Simon Charlton, Algosaibi’s chief restructuring officer said. The order from the commercial court in Dammam, in Saudi Arabia’s Eastern Province, will allow various asset freezes to be lifted and let the company go ahead with a plan to repay creditors about 26% of their claim values through a mixture of cash, shares and Saudi real estate. The long-running debt saga surrounding AHAB, as the company is known, has stained the kingdom’s reputation while it attempted to encourage more foreign investment to help finance a plan to diversify the economy. The court in 2020 approved claims from more than 100 local and international banks, hedge funds and other creditors. Read more.