The Al Gosaibi family of Saudi Arabia is to seek the blessing of the kingdom’s authorities for its proposals to settle the six-year dispute with creditors over its US$6 billion of debts by the end of this year.
Ahmed Hamed Al Gosaibi & Brothers (Ahab), the family partnership that owes the money after the collapse of its business in a storm of accusations in 2009, presented updated proposals to international claimants at a special meeting in Dubai yesterday and mapped out the steps towards implementation of the plan.
A statement from the company said: “Ahab has invited claimants into a process to agree the amounts of their claims so they may be presented to the judicial authorities in Saudi Arabia together with the settlement agreement. This will allow all parties to enter into a comprehensive agreement.”
The Saudi authorities’ attitude is crucial to any settlement. Courts in the country need to endorse an overall settlement before it can be implemented.
The dispute began in 2009 when banking businesses owned by Ahab went bust amid accusations of fraud, forgery and theft against Maan Al Sanea, an estranged relative by marriage of the Gosaibi family.
Mr Al Sanea declined to comment but has consistently denied all accusations against him and fought legal actions on three continents. He has started his own process of settlement with creditors.
There were no Saudi creditors at the Dubai meeting. They account for about one third of the total debts owed by Ahab and have taken their own proceedings for recovery in Saudi courts.
Claimants were given an update on the terms of the proposed settlement.
These have been marginally adjusted to take into account the falling value of financial instruments held by Ahab – equities and bonds – but the offer range is little changed.
Ahab is now offering about 25 cents on each dollar of debt backed by disposal of their assets, rising to 50 cents on proceeds of recovery from litigation against Mr Al Sanea. There are also adjusted terms to incentivise Ahab to implement the proposals and repay claimants in a shorter time frame than the original five years.
Simon Charlton, Ahab’s chief executive, said: “We have now invited claimants to commence the process that will lead to the presentation of agreed claims to the judicial authorities in Saudi Arabia.”
He said he hoped to be able to present claims to the courts in Al Khobar, where Ahab’s headquarters are based, by the end of March and have a final package agreed with creditors by June, enabling asset disposals and first repayments by the end of the year. “It has never been done before, so all I can do is get it done quickly and efficiently.”
The adjusted terms were welcomed by creditors. Stephen Jenkins, the first vice president of Bank ABC, a Bahraini creditor represented in the steering committee, said: “Any alternative would be value destroying.”
Joe Julian, the managing director of advisory firm Houlihan Lokey, representing the steering committee, called the proposal “a more complete and detailed settlement structure that will enhance materially the value of recovery to creditors”.
Hamad Al Gosaibi, son of the Ahab chairman Yousef, said: “Today is an important milestone in the final resolution of this long-standing matter.”
About 20 family members who are partners in Ahab are still prevented from travelling by the Saudi authorities
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