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.
Thursday 23, May 2019 BY KUDAKWASHE MUZORIWA
Saudi Arabia’s Dammam Commercial Court has accepted a filing by AHAB to have its decade-long dispute with creditors resolved under the Kingdom’s new bankruptcy law, rejecting a demand to liquidate the company filed by HSBC and Raiffeisen Bank.
The financial restructuring is one of the procedures envisaged by Saudi Arabia’s bankruptcy law which was introduced last year.
AHAB’s bankruptcy filing was seen as a key test of the new law for handling insolvency disputes, which became effective last year as part of reforms aimed at making the country more investor-friendly.
The court is now expected to appoint a bankruptcy trustee who will collect and assess creditors’ claims.
Additionally, the International Bank Corporation (TIBC), a defaulted Bahraini bank which has nearly $3 billion in claims against AHAB, welcomed the court’s decision to accept financial restructuring.
The lender, now administered by Central Bank of Bahrain (CBB), raised money in international markets, transferring the funds to AHAB in what a Cayman Islands court last year called one of the largest Ponzi schemes in history, reported Reuters.