Saudi conglomerate Saad Group's creditors sold some of their debt cheaply for just 15 cents on the dollar two weeks ago in order to reduce exposure, sources said.
The National newspaper said that the foreign banks made the sales. "The vast majority of the sellers are Asian banks, though one UK bank sold an exposure in the mid-teens [of cents]," one source said.
A representative of the Saad Group declined to comment.
Saad Group is embroiled in a legal disputes with Al Gossaibi group on different fraud charges.
Sources involved in the loan sale transaction said Al Gosaibi loans are selling for closer to 20 cents.
An Al Gosaibi representative declined to comment. "[The banks] want to clean up their books and any money they receive now is better than something small or nothing later," Janany Vamadeva, a banking analyst at Al Futtaim HC Securities in Dubai told the newspaper.
"They're [thinking that they're] not going to get anything from Saad and Al Gosaibi - it's a bad debt thing - so why don't we get something out of it? That explains the deep discount."
Al Gosaibi is believed to owe $9.2bn to more than 100 banks last year while the Saad Group owed at least $5.6bn to banks through syndicated loans.
By Staff
© Emirates 24|7 2010
