Saudi's Algosaibi estimates assets at a fraction of claims against it

DUBAI, April 1 Tue Apr 1, 2014 7:12am EDT

DUBAI, April 1 (Reuters) - Saudi Arabian conglomerate Ahmad Hamad Algosaibi & Brothers (AHAB) estimates its assets are worth less than a quarter of about $5.9 billion in claims made against it, a spokesman said as the group prepares a proposal to end one of the Middle East's biggest corporate debt disputes.

AHAB this week invited more than 70 financial institutions, including Saudi, regional and international banks, to a meeting in Dubai on May 7 to propose "a comprehensive settlement" with creditors.

Banks will be asked to form a working group to discuss the offer. If successful, it could end years of wrangling since the 2009 collapse of AHAB's Bahrain unit, The International Banking Corporation, and Awal Bank left more than 100 banks owed an amount that has been estimated at as much as $22 billion.

Awal Bank is owned by Maan al-Sanea, the Saudi billionaire head of the Saad Group, who married into the Algosaibi family 30 years ago and has been accused by the family of defrauding it of billions of dollars after he was put in charge of its financial businesses.

Al-Sanea and the Saad Group have denied the allegations, which have triggered a series of court battles in New York, London and elsewhere.

In an emailed statement to Reuters on Tuesday, an AHAB spokesman said the settlement proposal would be based on the group's existing assets plus funds that it says could be recovered in future from al-Sanea.

There may be a substantial gap between claims and money available to meet them, however. The spokesman said the $5.9 billion figure was "an estimate by AHAB of the value of claims made by various institutions asserting claims against AHAB in Saudi Arabia".

Meanwhile, AHAB estimates its assets, including its share portfolio and land in Saudi Arabia, at between 4.2 billion and 5.2 billion riyals ($1.1-1.4 billion), the spokesman said.

"AHAB is prepared to contribute significant assets to a settlement pool and, in addition, continue to fund the pursuit of recoveries from al-Sanea and his companies so that those recoveries can be used to significantly increase the size of the settlement pool," he said without elaborating.

AHAB has interests ranging from real estate to manufacturing. In January, a 60-year-old agreement for AHAB to bottle PepsiCo drinks was terminated after the Saudi company found it hard to invest in the operation.

"AHAB has been under an asset freeze for nearly five years with no access to credit, which has made it difficult to invest in any of its companies. This bottling operation had been one of the more significant operating businesses of AHAB," the spokesman said. (Reporting by Andrew Torchia; Editing by David Goodman)

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