Creditors have been pursuing Ahmad Hamad Algosaibi and Brothers (AHAB) as well as Saad Group since the duo defaulted on about $22 billion in combined debt in 2009.
Wednesday 17, April 2019 BY KUDAKWASHE MUZORIWA
A Saudi court has rejected two applications from conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB) to have its decade-long dispute with creditors resolved under the Kingdom's new bankruptcy law.
In February, the company applied for a protective settlement procedure under Saudi Arabia's new bankruptcy law and the application was rejected, AHAB then applied for a financial restructuring procedure another part of the country's bankruptcy framework.
The conglomerate’s case was seen as a key test of Saudi Arabia's new regime for handling insolvency disputes.
Simon Charlton, the Chief Restructuring Officer at AHAB, said that the Kingdom’s bankruptcy law is a new law that is untried and untested and that everyone is learning, but to be denied access to either process is damaging to the business as well as the employees who depend on it and importantly the creditors.
Saudi Arabia introduced the bankruptcy law in August last year and it has been welcomed as an important step towards making the Kingdom more investor-friendly. Before the introduction of the law, the main options for defaults were liquidation or cash injections.
Last month, a Saudi commercial court in Dammam approved an application by Saad Group to have their case resolved through the bankruptcy law, reported Reuters.