Debt Agreement Delayed

Bloomberg (21 April) reports that Saad Group hasn’t yet reached an agreement with its creditors to restructure its loans. During a conference in Riyadh, the company's Chief Financial Officer – Maan Al-Zayer – stated again, however, the company's commitment to meeting its obligations:

“Banks will be able to get their money back in due course,” whether it’s “from Saad, Algosaibi or any other entity,” He said “no agreement” has been reached on the company’s debt restructuring.

Mr Jim Courtovich, the Al-Gosaibi's spokesperson, is reported to have said in response that “it is entirely appropriate for Maan al-Sanea or the Saad Group to repay the creditors all monies owed from this matter” and that they “look forward to seeing their proposals to solve this problem.”

With billions of dollars owed by both companies, the relevant banks and financial institutions must be following events ever more closely to see what happens. Saad has continually promised, from the early stages, that it will meets its obligations to its creditors in full, though Bloomberg suggests this has again been delayed.

For its part, according to Dow Jones in November last year, AHAB offered its creditors 8.6 cents on the dollar, an offer, Dow claims, that banks found “ridiculous”.

One further point of interest from Mr Al-Zayer's news conference: Bloomberg reports that he again reiterated the Saad Group's belief that Saudi courts, based on Shariah, were the most suitable arena to settle this dispute, rather than foreign jurisdictions.

Mr Al- Zayer is quoted as saying: For “a creditor who is looking to retrieve money from any other party, without naming names, there is a proper channel to go through,” he said. “The Saudi system is able to provide that.”

Read the full Bloomberg report here:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aFZARcNGfduk

The Dow Jones report with regards AHAB's offer to banks can be read here:

http://www.zawya.com/printstory.cfm?storyid=ZW20091119000003&l=053104091119