Saudi Arabia

BNP Paribas SA and Citigroup Inc. are among global banks with the most exposure to about $14 billion of accepted claims related to the collapse of two Saudi business empires more than a decade ago, Bloomberg News reported. The French bank is owed about $750 million by Maan al-Sanea’s Saad Group and Ahmad Hamad Algosaibi & Brothers Co. -- two family holding companies that defaulted on roughly $16 billion in 2009 -- after a Saudi court accepted its claims, according to documents seen by Bloomberg. The U.S. bank is owed about $270 million by Saad Group, the documents show.

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Saudi Aramco shares have dropped more than 10 per cent from their peak as the Kingdom’s markets have been hit by growing jitters over the deteriorating situation in the Middle East following the US assassination of a top Iranian military commander, the Financial Times reported. The state oil company’s shares fell 1 per cent on Monday following a 1.7 per cent fall on Sunday. The slump has left Aramco’s shares trading at 34.2 riyal, the lowest level since the group floated on Saudi Arabia’s stock bourse last month.

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Saudi Arabia’s biggest construction company overhauled its top management, delaying plans to appoint an adviser for a proposed $15 billion debt restructuring, people familiar with the matter said, Bloomberg News reported. Saudi Binladin Group’s previous chairman and managing director left within months of being appointed, the people said, asking not to be identified because the matter hasn’t been made public. The company also named four new directors to its board this week, they said.

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Saudi Arabia is closely monitoring how much banks are lending to local investors rushing to buy shares in Aramco and what impact the mammoth offering will have on the kingdom’s financial sector, Bloomberg News reported. The Saudi Arabian Monetary Authority wants daily updates on how much credit banks are providing after it eased lending limits for buyers, according to people with knowledge of the matter.

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Saudi Aramco is undoubtedly huge and very profitable. But what’s the company worth? That question was one of many left unanswered Sunday when the company, the world’s dominant oil producer, announced it would sell a stake to investors, the International New York Times reported. Just about everything about the initial public offering remains to be determined in the coming days and weeks, including how large a portion Aramco will sell, and at what price. Most of the questions will revolve around decisions made by Crown Prince Mohammed bin Salman, the kingdom’s main policymaker.

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The merit of Saudi Arabia’s new bankruptcy law, part of efforts to help the kingdom attract investors, should become clearer in about a year after courts handle initial cases, a World Bank representative and senior government official told Reuters. A lack of modern bankruptcy regulations had created difficulties for struggling companies seeking to restructure debt with creditors since the 2009 global financial crisis and the more recent dip in oil prices, Reuters reported.

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Saudi Arabia sold sukuk, or Islamic bonds, worth $2.5 billion on Tuesday after receiving large demand for its first international debt sale since an assault on its oil facilities last month, Reuters reported. The strikes, which initially halved Saudi crude output, led to a rating downgrade by Fitch, which cited raised geopolitical risks and the possibility of further attacks. The sukuk offer a profit rate equivalent to 127 basis points over mid-swaps, a document showed.

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Rothschild & Co. and Moelis & Co. have been shortlisted to advise on restructuring about $15 billion of debt at Saudi Arabia’s biggest construction firm, according to people with knowledge of the matter, Bloomberg News reported. The boutique banks made pitches to Saudi Binladin Group last month for what would be one of the Middle East’s biggest debt revamps, the people said, asking not to be identified because the matter is private.

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Fitch Ratings has downgraded Saudi Arabia, citing vulnerabilities in the kingdom’s economic infrastructure after attacks on oil facilities this month knocked out half of its crude production, the Financial Times reported. The New York-based rating agency on Monday dropped Saudi Arabia’s long-term foreign currency issuer default rating to A from A+, with a stable outlook. Fitch said the downgrade followed the escalation in geopolitical and military tension in the Gulf as well as deteriorating fiscal and external balance sheets.

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Billionaire Mukesh Ambani’s Reliance Industries Ltd. is on a mission to reduce debt after racking up $76 billion in capital expenditure in the last five years, Bloomberg News reported. The conglomerate aims to be a zero-net-debt company in 18 months, Asia’s richest man told shareholders Monday. Aiding that effort would be a decision to sell 20% of Reliance’s oil-to-chemicals business to Saudi Arabian Oil Co., or Aramco, at an enterprise value of $75 billion. The company will also start preparing to list its retail and telecommunications units within five years, Ambani said.

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