AHAB Proposes Comprehensive Settlement - WTOC-TV: Savannah, Beaufort, SC, News, Weather & Sports

AHAB Proposes Comprehensive Settlement

Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact pressreleases@worldnow.com.

SOURCE Ahmad Hamad Algosaibi & Brothers Company

Agreement Structure will Guarantee Creditors a Minimum of 20 Cents on the Dollar

DUBAI, United Arab Emirates, May 7, 2014 /PRNewswire/ -- Ahmad Hamad Algosaibi & Brothers ("AHAB") today outlined a comprehensive settlement proposal to a group of banks and other financial institutions with claims against AHAB.  The claims asserted by banks, totaling billions of dollars, arise out of liabilities incurred through a massive fraud perpetrated by Maan Al Sanea when he was head of the Money Exchange division of AHAB.  The fraud left AHAB facing around USD 6 billion in direct liabilities to banks and other financial institutions. These liabilities have spawned more than 70 lawsuits in at least 10 countries over the past five years.

"The proposal we outlined today is a serious and genuine offer to maximize the recoveries for AHAB's creditors and end a five year battle and the resulting stalemate in which we find ourselves today," said Simon Charlton, AHAB's Acting CEO. "The only alternative to this process is long, costly, uncertain, and in no one's best interest."

Charlton outlined a proposal in which AHAB would make an upfront payment equal to approximately 10 percent of creditors' claims as a sign of good faith and its commitment to the process.  Additionally, the proposal includes recoveries from third parties, with the goal of a total recovery for creditors of 40-60 percent of claimed amounts.  These recoveries would come from AHAB's civil lawsuits against Al Sanea and entities controlled by him in the Cayman Islands and Saudi Arabia, and claims against two banks – SABB and SAMBA – for the the value of two substantial share portfolios once owned by AHAB and seized unilaterally by the banks in a move AHAB asserts violated legal orders and the laws of Saudi Arabia.  AHAB will guarantee a minimum recovery of 20 cents on the dollar, secured by the company's extensive real estate portfolio. 

Mr. Charlton described for the audience that the most likely alternative to a consensual settlement with AHAB would consist of banks competing with each other to obtain individual enforcement orders in Saudi Arabia – proceedings that will incur massive legal costs, years of litigation, and significant uncertainty. The process would be further complicated due to the Royal Order that prohibits any sale or transfer of AHAB assets for the protection of all creditors.  AHAB's proposal creates a framework for a settlement whereby AHAB and its creditors would jointly approach the Royal Court to receive equal treatment in compliance with Sharia law.

The meeting also featured AHAB CFO, Ben Jones, who presented a realistic picture of AHAB's financial condition.  He described a company in severe distress following the discovery of the Al Sanea fraud.  The company has lost all of its businesses outside Saudi Arabia, has no access to credit markets, and faces wary counterparties that are uncertain of AHAB's future.  Mr. Jones explained that AHAB has taken serious steps to restructure its business, including hiring a team of professional senior executives, working to drastically reorganize the business and cut costs.  He and Mr. Charlton emphasized the Algosaibi family's strong desire for a global resolution after five years of expensive litigation and turmoil. 

In addition to the AHAB presentation, the all-day meeting included a question and answer session and a banks-only discussion in order organize future negotiations with AHAB.

©2012 PR Newswire. All Rights Reserved.

Powered by WorldNow