LONDON, (Reuters) – Holders of a $650 million Islamic bond issued by a unit of troubled Saudi firm Saad have been asked to vote on dissolving the sukuk, trustee Citi said on Tuesday.

Citi said a “dissolution event” had taken place, triggering the bondholder vote.

The bond would be dissolved if holders of 25 percent of the sukuk agree to the proposal, or if Citi was directed by an extraordinary resolution of the sukuk holders, the bank said in a statement to Bahrain’s stock exchange.

A dissolution of the bond, issued via the Golden Belt 1 Sukuk Company in 2007, could be a step towards bondholders claiming their money back from Saad

Citi and Saad declined to comment further on the issue.

Saad Group’s troubles started in June, when it announced plans to restructure its debts, and the Saudi authorities froze bank accounts owned by Maan al-Sanea, the conglomerate’s billionaire chairman.

Last month investors in the sukuk considered setting up a committee to represent them at creditor meetings, as claims against Saad mounted.

Unlike mainstream bonds, sukuk do not pay interest. Instead, sukuk holders own the asset used to underpin the sukuk — in Saad’s case land in Saudi Arabia — and receive returns based on rental income.

The Saad sukuk is scheduled to mature in 2012, paying coupons twice a year. The May 2009 coupon has already been paid, but it is not clear whether the November coupon will be paid as scheduled.

Bank lenders to a Saad unit, Saad Investments Company Ltd, last month drafted a winding up order seeking to claim back $9.2 billion in loans.