Saudi Arabia has accelerated steps to resolve a $22-billion debt dispute that is seen by investors as a litmus test of Crown Prince Mohammed bin Salman’s commitment to reforms, three sources familiar with the matter say.
Vast wealth and the promise of dramatic change make for cautious optimism concerning Saudi Arabia, the chief executive…515 Views | the publication reaches you by | Saudi Arabia Today
From Switzerland to the Cayman Islands, the two groups have squabbled over which of them is to blame for the meltdown.
The Saudi authorities signaled their impatience in October, when Saad Group owner Maan al-Sanea was detained for unpaid debt. This spurred efforts by the al-Sanea family to try to resolve the debt dispute, the sources said.
Saad Group took its first big step to engage with creditors last year by hiring a financial consultancy, Reemas Group, to offer a proposed settlement covering $4 billion in debt.
In a further sign of momentum, a three-judge tribunal set up in 2016 to deal with financial claims against AHAB and Saad group has approved creditor claims of about 11.5 billion riyals ($3 billion)against AHAB and appointed liquidators to deal with the unwinding of Saad Group’s business empire, one of the sources said.
Such steps could be vital for the government to win over investors and secure foreign funds for privatization projects under Vision 2030, the plan unveiled by Prince Mohammed in April 2016 to transform Saudi Arabia and reduce its reliance on oil.
“This is a $20 billion-plus problem for Saudi Arabia and unless it’s handled well it will create a long-term legacy issue for some foreign investors,” said one of the people familiar with the matter.
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