Foreign creditors reportedly concerned by Saudi's Saad debt deal
Source: BI-ME and Reuters , Author: BI-ME staff
Posted: Sat September 19, 2009 8:31 pm

SAUDI ARABIA. International creditors of troubled Saudi groups Saad and Algosaibi fear being sidestepped by a debt deal reportedly struck between Saad group and Saudi banks, bankers said on Thursday.

Two Saudi bankers told Reuters earlier a Saudi government panel had brokered a debt restructuring deal between Saad and Saudi banks, excluding international banks.

Saad and Ahmad Hamad Algosaibi Brothers and several banks are battling it out in court over the fallout of their debt restructuring, with some bankers putting the total debt involved at US$22 billion.

BNP Paribas and Citigroup are amongst numerous regional and international banks with exposures.

"International banks have not been dealt with", a Bahrain-based source familiar with the debt restructuring told Reuters. If confirmed, any local deal would alienate the international financial community, he said.

Sanea sold on Wednesday a stake of at least 2.8% stake in Samba Financial Group, which was worth at least SAR1.17 billion (US$311 million) based on Wednesday's closing prices, and one of the Saudi bankers said this transaction was linked to the agreement with Saudi creditors.

A senior Dubai-based investment banker said the debt restructuring process would suffer if it was broken up into local and international creditors.

"We are concerned that if local banks are separated from international banks it makes for an incredibly inefficient process", he said.

The restructuring process has already started to fray with several banks having launched lawsuits against the Algosaibi group over alleged financial irregularities.

The banker said a separate debt settlement would further weigh on international banks' perception of Saudi Arabia, after bankers were shocked by the sudden debt problems at the two prominent groups.

"If they differentiate between national and local banks, this will cause a much bigger impediment for big international banks to work with local borrowers", the banker said.

RELATED ARTICLES

Saudi, foreign banks agree to reschedule Saad debt

Saad, Gosaibi groups impact on Gulf widens

Saudi banks exposure to Saad, Algosaibi estimated at US$5 billion

UAE banks have 'significant' exposure to troubled Saudi firms

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: April 20, 2018
INTERNATIONAL. Focus of the report is how we are nearing the end of the largest monetary policy experiment of all time in a backdrop of ascendant nationalism, staggering inequality and a widespread loss of hope among the younger generation.
date:Posted: April 19, 2018
UAE. Software technology sector saw most number of professionals changing jobs in 2017; Lack of opportunities for career advancement touted as the biggest reason.
date:Posted: April 19, 2018
LEBANON. Drop due to the suspension of interest-rate subsidies on housing loans at the beginning of the year; The index is at its lowest level since Q2 2015 and the third lowest level in 43 quarterly readings; Reviving demand in Lebanon requires immediate measures and incentives from the government.
INTERNATIONAL. Focus of the report is how we are nearing the end of the largest monetary policy experiment of all time in a backdrop of ascendant nationalism, staggering inequality and a widespread loss of hope among the younger generation.
dhgate