Saad picks adviser on $6bn debt talks

MAAN AL-SANEA. Billionaire chairman of Saad Group saw his company run into difficulties earlier this month, prompting the authorities to freeze his accounts. (Getty Images)

Saudi Arabia's Saad Group has embarked on the complex restructuring of its $6 billion debts, with Abu Dhabi Commercial Bank one of the most highly exposed to the troubled company.

Saad has put forward Credit Suisse as an adviser to its bank lenders, a source with knowledge of the situation said, and it now faces the task of negotiating with dozens of lenders in the region and across the world.

"The company is looking for assistance to help it work through its very complex debt structure," the source told Reuters on Wednesday.

The appointment of the bank as an advisor for the $6 billion restructuring - one of the largest in the Middle East - was dependent on the approval by lenders, the source said.

Privately held investment company Saad Group ran into difficulties earlier in June, prompting the Saudi central bank to freeze the accounts of its billionaire chairman, Maan al-Sanea.

Another private group, Ahmad Hamad Algosaibi & Brothers Company (AHAB) is separately also restructuring.

Saad Group and the Algosaibi family borrowed at least $6.3 billion in syndicated loans, Reuters LPC data shows, but it is not clear how much remains on the banks' books.

Abu Dhabi Commercial Bank (ABCB) is owed at least $500 million, a banking source said, while other lenders to the two groups include Citigroup, BNP Paribas, HSBC, Standard Chartered and JP Morgan, along with a host of others, according to Reuters data.

ADCB's chief executive, Ala'a Eraiqat, declined to comment on the nature or magnitude of any exposure but said it was mostly backed up with cash deposits held at the bank.

"We are in close contact with them and working with their financial advisers and the rest of the lenders for a speedy resolution," Eraiqat told Reuters. "I cannot comment on the amounts or give any more details."

Bankers have three current loans to the two groups, the LPC data shows. Such large loans are typically originated by large bank syndicates who can then choose to sell on parts or all of the debt into secondary markets.

One is a $2.815 billion loan to the Saad Group dated August 2007 that matures in August 2010. A second $2.75 billion loan, also to the Saad Group, was taken out in June 07 and matures in June 2012.

Ahmad Hamad Algosaibi & Bros Co borrowed $700 million in May 2007 which matures in May 2010. The group also took a $50 million murabaha deal, but that may already have matured in April 2009. (Reuters)

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READERS' COMMENTS

Still a "billlionaire?
Posted by Geriant, Dubai, UAE on Thursday 25 June 2009 at 09:57 UAE time


If he owes more than he is worth, how come you still call him a billionaire?

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