Saudi conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB) said on Wednesday it had filed last week for a financial restructuring under Saudi Arabia’s new bankruptcy law, as it seeks to end a decade-long dispute with creditors, Reuters reported. Saudi Arabia’s bankruptcy law, which came into effect in August, is an important step towards making the kingdom more investor friendly, offering a legal framework to struggling companies seeking to restructure debt following the 2009 global financial crisis and, more recently, weaker oil prices. Creditors have been pursuing AHAB and Saad Group, another Saudi conglomerate, since they defaulted on about $22 billion in combined debt in 2009. Before the introduction of the law, modern bankruptcy legislation did not exist in Saudi Arabia, meaning the main options for defaults were liquidation or cash injections. AHAB’s earlier application for a “protective settlement procedure,” the first by a high-profile company under the new law, was rejected by a commercial court in Dammam which said it had not provided all the required details.
