RIYADH, (Reuters) – Saudi Arabia has created a special panel in connection with the restructuring of heavily indebted Algosaibi conglomerate, whose accounts remain frozen, a company official said in remarks published on Monday.
The precise role of the panel, a response to the country’s biggest financial crisis since the global economic meltdown, was not immediately clear.
“The government committee that was formed is continuing its works and it summons the interested (parties) whenever the need arises,” Mohamed Salem Al-Hindi, vice president of Ahmad Hamad Algosaibi and Brothers (AHAB), told al-Hayat newspaper
“The situation remains as it was,” he said, when asked whether the Saudi central bank had done anything to end a freeze imposed on AHAB’s accounts.
Banks and regulators are grappling with the multibillion-dollar restructuring efforts of AHAB and privately owned Saad Group, the biggest blow yet to the Gulf Arab states since the start of the financial crisis.
The Saudi central bank last month froze accounts related to AHAB a few days after it froze personal accounts of Saad Group head Maan Al-Sanea.
Numerous banks from the Gulf Arab region have said they face potential writedowns on loans made to the troubled groups.
Hindi also told the newspaper all of the businesses of family-owned AHAB were profitable except the banking business, but that the consolidated debt of the group had yet to be determined.
“The size of the group’s (AHAB) overall debt is until now not known,” Hindi said.
Loans owed by AHAB’s non-banking units did not exceed 30 million riyals ($8 million), he said.
Al-Hayat said AHAB held a meeting on Sunday with Saudi lenders. The newspaper said the group had asked the banks to defer repayments by at least three months, but it did not cite a source. Hindi declined to comment on this, al-Hayat said.
Reuters tried to reach a company spokesman at AHAB’s headquarters and Alaa al-Hashem, a company official, for comment but neither were immediately reachable.
Hindi confirmed that law firm Salah Al-Hejailan was no longer representing AHAB in a dispute with Saad Group’s Sanea.
The newspaper gave no further details about the government committee.