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DUBAI May 7 Saudi Arabia's Ahmad Hamad
Algosaibi and Brothers (AHAB) has proposed a debt restructuring
plan that would involve creditors being repaid a minimum of 20
cents on every dollar owed, as it attempts to restart
long-stalled talks on a settlement.
The family conglomerate collapsed in 2009 along with Saad
Group, a separate Saudi business empire led by Maan al-Sanea,
since when the two have been battling over who was to blame for
the issues which affected their respective conglomerates.
AHAB said in a statement on Wednesday, issued following a
meeting with creditors in Dubai, that it had direct liabilities
to banks and financial institutions worth around $6 billion.
The company said it was excluding claims to units such as
The International Banking Corp (TIBC), a Bahrain-based
subsidiary whose failure in 2009 revealed the problems at the
In a separate development, AHAB was named as defendant in a
$1.9 billion lawsuit brought by law firm Trowers & Hamlins as
administrator for TIBC, acting on behalf of the Central Bank of
Bahrain, a statement from Trowers & Hamlins said.
Under AHAB's proposal, it would pay 10 percent of claims
upfront, to show good faith, according to the statement. It
would then return a further 10 percent after five years, paid
for by a pool of real-estate assets which AHAB would set aside
as security, a copy of a presentation to creditors, and
distributed to Reuters by AHAB, said.
AHAB did not specify what real estate would make up the
collateral. The presentation said AHAB has a real estate
portfolio valued at 3.44 billion riyals ($917.2 million).
SUCCESS NOT GUARANTEED
AHAB said it was aiming to return between 40 and 60 percent
of total claims to creditors, depending on potential recoveries
from legal cases including in the Cayman Islands and Saudi
Arabia against Sanea and companies controlled by him, as well as
lawsuits against two Saudi banks.
Cases in Saudi against Sanea and his entities include claims
that Sanea benefited from unauthorised cheques and electronic
transfers, in which AHAB is seeking a combined 12.98 billion
riyals. It is also petitioning for the return of shares in
lender Samba Financial Group, held by Sanea, which
have a value of 2.8 billion riyals, the presentation said.
In the Caymans, AHAB is seeking claims from Saad Group
entities worth around 3.375 billion riyals, the document added.
Sanea and his lawyers have consistently rejected these
claims. No-one at Saad Group could immediately be reached for
The claims against Samba and Saudi British Bank
(SABB) were brought by AHAB after the banks seized share
portfolios to settle alleged debts. AHAB is seeking 1.8 billion
riyals and 1.2 billion respectively from the banks and expects a
resolution to the cases in between one and three years' time,
the presentation said.
Samba couldn't immediately be reached for comment, while
SABB declined to comment.
AHAB is also being pursued in the courts by Trowers &
Hamlins. In the law firm's statement, it said it had filed a new
suit at the Bahrain Chamber of Dispute Resolution, as part of a
wider effort to reclaim assets from AHAB on behalf of TIBC's
international and regional bank creditors who are owed $2.6
The law firm said the suit was "in relation to the
deliberate misappropriation of funds raised through the creation
of a fraudulent loan book which was at the heart of TIBC's
operations." This loan book was then used by AHAB to trade for
its own account, the law firm alleges.
AHAB owes TIBC $3.2 billion, Abdullah Mutawi, the partner at
Trowers & Hamlins, was quoted as saying in the statement.
AHAB didn't immediately response to a request for comment.
AHAB said in its presentation document that "success cannot
be guaranteed, however even low-end recovery estimates realise
significant benefit for the creditors."
In signing up to the restructuring proposal, creditors would
have to stop all legal actions against AHAB, the presentation
said. Once AHAB had repaid 50 percent of the cash, any money
recovered by the conglomerate would be split, with half going to
the main Algosaibi family and the rest to pay creditor debt.
($1 = 3.7505 Saudi Riyals)
(Editing by Louise Heavens and David Holmes)