DUBAI- Saudi Arabian conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB) has begun canvassing creditor support for its bid to become the first company to achieve a settlement under the kingdom's new bankruptcy law, a senior executive said.
Creditors will vote in the first quarter of 2019 on whether they agree to AHAB's plan to reach a protective settlement under the law, said Simon Charlton, AHAB’s chief restructuring officer.
Similar to Chapter 11 proceedings in the United States, the mechanism offers a cram-down provision, stopping minority dissenting creditors from blocking a settlement agreed by the majority.
Any deal would provide a breakthrough to the kingdom's biggest debt row that has dragged on since AHAB and another firm, Saad Group, defaulted on about $22 billion of debt in 2009.
AHAB this month became the first company to file for a settlement under the law, which came into effect in August 2018, and is an integral part of the government's plan to pull in foreign investment and rewire the economy away from a dependence on oil.
The Commercial Court in Dammam, where AHAB filed for the settlement, this week told the company to notify all of its more than 100 creditors that it had filed the petition.
AHAB has been told by the court to appoint an approved administrator to review its petition by the time of the next hearing on Jan. 7, and the court will then set a schedule for a vote by creditors, said Charlton.
The judge presiding over the hearing indicated the court would like to have the process completed within six months, Charlton added.
(Reporting By Tom Arnold; Editing by Kirsten Donovan) ((Tom.Arnold@thomsonreuters.com; +97144536265; Reuters Messaging: firstname.lastname@example.org))