New Al Gosaibi debt deal offer 25 per cent higher than previous proposal

The heavily indebted Al Gosaibi family of Saudi Arabia is preparing to increase its offer to creditors owed US$6.4 billion.

The new terms will be put to creditors at a meeting in Dubai on June 2. It will increase the amount the family will guarantee to creditors to about 28 cents in the dollar on the total of US$6.4 billion of claims against it by about 90 banks and financial institutions, an increase of 25 per cent over its previous offer.

The new deal has already been agreed by a steering committee of five creditors, representing about 60 per cent of the overall debt. The final level of settlement with creditors could rise to as much as 50 cents if a string of legal actions are resolved satisfactorily.

The Al Gosaibis, once one of the most prestigious of Saudi Arabia’s merchant families, will be left with some operating businesses in the kingdom, but its wealth has been greatly reduced.

Ahmad Hamad Al Ghosaibi & Brothers (Ahab), the family partnership, under the chief executive Simon Charlton, has begun talks with 11 Saudi-controlled banks that have so far stayed outside the negotiating process, and which account for the rest of the debt, preferring to take legal action against the family in Saudi courts.

“The revised terms of our proposal were reached after a long and intense period of negotiations with the Steering Committee and we believe this is the best possible deal for all parties,” Mr Charlton said. “We are hopeful that all claimants will participate and, after recent discussions with certain banks in Saudi Arabia, I am increasingly confident that additional parties will indeed join the process.”

He repeated his offer of an overall “peace deal” with other parties in the long-running dispute, specifically Maan Al Sanea, the businessman related to the Al Gosaibis by marriage.

Ahab accused Mr Al Sanea of theft, fraud and forgery in legal actions on three continents after firms owned by them were unable to pay debts. Mr Al Sanea has denied all of the allegations.

There are also legal actions in the Cayman Islands involving Grant Thornton, liquidator to Mr Al Sanea’s businesses there.

“We hope that the June 2 meeting will end six years of deadlock and also serve as a catalyst for settlement discussions with Maan Al Sanea and the defendants of litigation in the Cayman Islands,” Mr Charlton added.

“This whole affair has persisted for too long and at too great a cost. There are finite pools of assets, which are being diminished both by the time value of money and huge fees for a cadre of advisers on all sides. It is in everyone’s best interests to bring this matter to a close.”

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