Goldman Sachs Group Inc. still sees an imminent debt restructuring in Lebanon as unlikely but is already turning its attention to how much investors could recover as one of the world’s most indebted countries teeters on the brink of financial crisis, Bloomberg News reported. Under Goldman’s base scenario, foreign investors would recover 35 cents on the dollar, Farouk Soussa, an economist at Goldman Sachs, said in a report. But he said any debt overhaul would put the country’s banks first, meaning “the actual recovery value” would be significantly different to contain damage.
North Africa/Middle East
Noor Bank PJSC, which provided a $100 million loan to the collapsed Abraaj Group, won the right to swap the debt for stakes in some of the Dubai-based buyout firm’s funds, according to people with knowledge of the matter. Privately-held Noor Bank won approval from a court in the Cayman Islands, where Abraaj is undergoing a supervised restructuring, to take ownership of stakes in the funds that were pledged against the loan, the people said, asking not to be identified because the process is private, Bloomberg News reported.
As its economy buckles, Iran is zealously cracking down on financial fraud, the Wall Street Journal reported. Central to its efforts is a fast-track fraud court approved by Supreme Leader Ayatollah Ali Khamenei in August that has sentenced dozens of people, including some 50 men this month, to up to 20 years for paying bribes, embezzlement and damaging the economy. In November, authorities executed two men accused of smuggling foreign currency and manipulating the gold-coin market, the Iranian judiciary’s news service reported.
Saudi Arabian conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB) has begun canvassing creditor support for its bid to become the first company to achieve a settlement under the kingdom’s new bankruptcy law, a senior executive said. Creditors will vote in the first quarter of 2019 on whether they agree to AHAB’s plan to reach a protective settlement under the law, said Simon Charlton, AHAB’s chief restructuring officer, Reuters reported.
Lebanon’s finance ministry and central bank have come up with a new plan to finance the debt-burdened country, the Financial Times reported. But their method is set to increase its cost of financing even further, as the government starts issuing local currency debt at market rates — higher than the rates treasury bills are currently issued at — in order to attract local banks.
Saad Group and bank creditors of the Saudi Arabian conglomerate have both selected advisers in a bid to try to reach a deal that could help end the kingdom’s largest and longest-running debt dispute, financial sources said on Thursday. The appointments of London-based Orchard Corporate Strategy by Saad and EY by creditors, is the latest attempt to reach an agreement that will be complicated by an ongoing auction of the company’s assets, Reuters reported.
Jet Airways Ltd and second-largest shareholder Etihad Airways have been holding rescue talks with bankers of the indebted Indian carrier, three people aware of the matter told Reuters on Wednesday. Executives of the airlines met State Bank of India officials in recent days to discuss Jet's cash flow and business plan, two of the people said, the International New York Times reported on a Reuters story. One said Jet has outstanding dues of about $400 million (314.29 million pounds), mainly owed to lessors and vendors.
Etihad Airways is holding talks with Jet Airways Ltd and its bankers on a rescue plan for the debt-laden Indian carrier, two sources aware of the matter told Reuters. Executives from Etihad and Jet have met some of the airline's bankers in Mumbai in recent days to discuss ways to address its cash flow issues and evaluate the carrier's future business plan, the sources said.
Bahrain went from being a bond-market pariah to a darling this year after its Gulf neighbors came to its rescue to ward off any default. But falling oil prices have brought the island kingdom’s finances into focus again, Bloomberg News reported. After outperforming its Gulf peers in the third quarter, Bahrain’s dollar debt has been hurt by crude’s slump in the past two months. Investors are concerned about the government’s ability to put its austerity plan into action, with oil prices well below what it needs to balance its budget.