Abu Dhabi conglomerate Al Jaber Group has appointed a new chief financial officer (CFO) as it pushes to close a long-awaited $4.5 billion restructuring before the end of the first quarter, three sources with knowledge of the matter said on Tuesday.
Al Jaber, a family-owned group with operations in aviation, construction and retail, has been in talks with bank creditors to renegotiate its obligations since 2011 and has seen a number of management changes during that time, as it looks to revamp after overextending during a regional economic boom which peaked in 2009.
The company confirmed the appointment of Sam Deeb as CFO but declined comment on any target to complete its debt renegotiations. Deeb was previously CFO at Lebanon-based consumer goods firmTransmed and is a former financial head of telecoms operators Zain and Mobinil, according to his LinkedIn page.
He takes over from Robert Palazzo, who served as interim CFO after Richard Hollands resigned in April.
Like many family-owned groups in the Gulf, Al Jaber looked to expand beyond its core business - in Al Jaber's case construction - but was dragged down by poor performances in the new fields, the weight of debt raised to achieve the expansion and a slowdown in the local construction sector.
Despite agreeing a five-year plan to repay obligations in March with a creditor committee appointed to head talks on behalf of the lenders involved, no deal has been done with the full group as some banks refused to sign up.
Citigroup and International Bank of Qatar were holdouts, sources told Reuters in October, while two sources told Reuters on Tuesday that Japan's Sumitomo Mitsui Banking Corp had yet to sign up. Sumitomo Mitsui had no immediate comment.
With an untested and complex insolvency regime in place in the United Arab Emirates, companies restructuring debt have to secure 100 percent creditor agreements before a deal can be done and have no mechanisms to force all lenders to the table.
Buying out the debts of resistant creditors to allow for a final deal was always seen to be the most likely route out of the impasse, as has happened in previous UAE restructurings, including a $25 billion debt deal at Dubai World.
This process has now started, with Citi selling its debt at a discount to Abu Dhabi Commercial Bank(ADCB), three sources told Reuters, declining to specify the level of discount. Both Citi and ADCB declined to comment.
The other two are expected to follow suit, especially as their exposures are a small percentage of the total debt, allowing a deal to be completed by the end of the first quarter.
"If people want to exit the restructuring, I'm sure there will be the appetite among the local banks to take on their debt if it's sold at the right price," said one source with knowledge of the restructuring.