Earlier this week, a Saudi court approved an application by Saad Group to have their case resolved through Saudi Arabia's new bankruptcy law.
Thursday 14, March 2019 BY KUDAKWASHE MUZORIWA
Saudi Arabia’s Ahmad Hamad Algosaibi and Brothers (AHAB) has announced that it filed for a financial restructuring under the Kingdom's new bankruptcy law last week, as it seeks to end a decade-long dispute with creditors.
Saudi Arabia's bankruptcy law, which came into effect in August, is an important step towards making the Kingdom more investor-friendly, offering a legal framework to struggling companies seeking to restructure debt following the 2009 global financial crisis and 2019 weaker oil prices.
Before the introduction of the law, modern bankruptcy legislation did not exist in the Kingdom and the main options for defaults were liquidation or cash injections.
Simon Charlton, AHAB's Chief Restructuring Officer, said that the conglomerate has appealed against that rejection and is waiting to hear from the court, but it had in the meantime decided to file a petition for financial restructuring.
AHAB has been trying to move the jurisdiction of its case from the Joint Directorate of Enforcement at the General Court in Al Khobar (JDEK) to the Commercial Court in Dammam, under the bankruptcy law, to avoid the risk of a disorganised liquidation.
Creditors have been pursuing AHAB and Saad Group since they defaulted on about $22 billion in combined debt in 2009, reported Reuters.