North Africa/Middle East

Embattled Saudi construction firm Mohammad Al Mojil Group (MMG) said it has written directly to Deputy Crown Prince Mohammed bin Salman explaining that it may not be able to continue operating, Reuters reported. It was unclear if the privately owned company was seeking financial or other assistance from the government. In a short statement via the stock exchange on Monday, MMG said its letter to the prince also addressed constraints imposed by banks and the government, and legal restrictions that were blocking company leaders from speaking publicly about proposed solutions to its problems.

The International Monetary Fund’s executive board on Friday approved Egypt’s request for a $12 billion loan facility, after the North African country met its requirements to implement tough measures to revive its floundering economy, The Wall Street Journal reported. The first tranche of $2.75 billion can be disbursed immediately and will be added to the cash-strapped country’s international reserves, the IMF said. The bailout “will help Egypt restore macroeconomic stability and promote inclusive growth,” the fund said.

Construction giant Saudi Oger has asked banks to agree to a freeze in repayments on at least 13 billion riyals ($3.5 billion) of debt, sources aware of the matter said, as it seeks more time to collect money owed by the kingdom's government, Reuters reported. The request opens the way for the company, owned by the family of Lebanese Prime Minister-designate Saad al-Hariri, to press ahead with seeking one of the largest debt restructuring deals in the Gulf since the slide in oil prices in June 2014.

Egypt has devalued its currency by 48% and announced that it will be allowed to float – measures that meet a key demand by the International Monetary Fund in order to secure a $12bn (£9.6bn) loan over three years to overhaul its ailing economy, The Guardian reported. The devaluation pegged the Egyptian pound at 13 to the dollar, up from nearly nine on the official market. A central bank auction of dollars will be held later on Thursday, allowing supply and demand to determine the value of the pound for the first time in decades.

The new bankruptcy law could come into effect by the end of the year, amid concerns that the court system may struggle to implement it effectively, The National reported. The bankruptcy law was published in the country’s official legal gazette on September 29, stating that it will come into effect three months later, according to a senior Abu Dhabi lawyer and a senior executive at the Ministry of Finance.

Saudis who switched on a popular talk show last week to listen to officials explain why state employees had their take-home pay cut were in for a shock, Bloomberg News reported. Within minutes of the start of MBC1’s “Al Thamena” program, viewers were told that the public sector was bloated. Civil Service Minister Khalid Al-Araj said state workers were productive for no more than an hour a day, but see their jobs as a right. Mohammad Al Tuwaijri, the deputy economy minister, said without the recent austerity measures, the kingdom would have gone bankrupt in three to four years.

Low oil prices and an increasingly costly war in Yemen have torn a yawning hole in the Saudi budget and created a crisis that has led to cuts in public spending, reductions in take-home pay and benefits for government workers and a host of new fees and fines, the International New York Times reported. Huge subsidies for fuel, water and electricity that encourage overconsumption are being curtailed. For Almarai, one of the top brands in the Middle East, that will mean $133 million from the bottom line this year, company officials said.

Ahead of a multibillion-dollar bond issue, Saudi Arabia warned investors of the challenges that cheap oil poses to its economy and said it would take 70 years to sell all of its oil, prompting concerns that some of it could go unrealized, The Wall Street Journal reported. The disclosures—included in the government’s bond prospectus issued on Tuesday—raise questions over the ability of the oil-dependent kingdom to quickly turn around its economic fortunes after more than two years of low crude prices.

Gulf Keystone Petroleum Ltd. bondholders won control of the oil producer after a London judge approved a debt-restructuring agreement, Bloomberg News reported yesterday. The decision gives creditors 85.5 percent of the company, according to a court ruling yesterday. The agreement won near-unanimous support from bondholders last week. Gulf Keystone, which operates in the Kurdish region of Iraq, missed bond payments in April as it struggled with the collapse in crude prices to below $50 a barrel.

The Saudi Ministry of Commerce and Investment has published a new bankruptcy draft law and invited feedback those interested, with their opinions and suggestions before the deadline of October 27, Al Arabiya reported today. The Ministry of Commerce said that the bankruptcy law will enable stalled projects to be completed taking into consideration the financial constraints and to carry forward the business or to liquidate them if need be, while at the same time guaranteeing the rights of creditors and other stakeholders.