Algosaibi inks deal to end biggest Mideast default

Bloomberg

Ahmad Hamad Algosaibi & Brothers Co. signed a deal with a majority of its creditor banks to restructure about $6 billion of debt, taking the Saudi conglomerate one step closer to ending a seven-year impasse over the Middle East’s biggest default.
The agreement with a five-member committee representing about 80 banks, which include BNP Paribas SA and Standard Chartered Plc, formally commits Algosaibi and the lenders “to support the implementation of the agreed settlement terms,” the Saudi Arabian company said in e-mailed statement on Monday.
About 90 percent of the creditors,
accounting for 56 percent of the value
of the debt, have signed the deal, and
the remaining lenders will be asked
to sign in the next few weeks, Algosaibi said.
Algosaibi and billionaire Maan al-Sanea’s Saad Group, two family holding companies related by marital ties, defaulted on at least $15.7 billion in 2009 as the global economic crisis froze credit markets and asset prices slumped.
The companies have been locked in legal disputes ever since. The restructuring talks involved local and international lenders including U.S. hedge fund Fortress Investment Group LLC.
Algosaibi, which has interests ranging from construction to shipping, made an improved offer to banks last year, guaranteeing they would recover at least 40 percent on the debt.