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15 January 2020

BNP, Citigroup among most exposed in Middle East’s biggest default

The case is currently going through recently-established bankruptcy proceedings in Saudi Arabia, introduced as part of the Kingdom’s efforts to attract foreign investors

A resolution would end the uncertainty for banks and help the country’s business appeal/Bloomberg

by Bloomberg

BNP Paribas and Citigroup are among global banks with the most exposure to around $14 billion of accepted claims related to the collapse of two Saudi business empires more than a decade ago.

BNP Paribas is owed around $750 million by Saad Group and Ahmad Hamad Algosaibi & Brothers Company (AHAB)—two family holding companies that defaulted on nearly $16 billion in 2009—after a Saudi court accepted the bank’s claims.

Additionally, according to court documents Saad Group owes Citigroup about $270 million.

The court’s approval last month of claims from more than 100 local and international banks, hedge funds and other creditors is a milestone in the Middle East’s longest-running and biggest defaults that have involved court cases spanning from London to the Cayman Islands.

Family-owned conglomerate AHAB, defaulted on approximately $9 billion of debt, while Saad Group was unable to repay roughly $7 billion after the global economic crisis froze credit markets and asset prices slumped.

The court also accepted nearly $170 million worth of claims from Deutsche Bank, around $200 million from Standard Chartered and $175 million from Raiffeisen Bank International.

Regionally, Mashreq Bank had about $630 million of its claims accepted, Emirates NBD Bank nearly $330 million while Abu Dhabi Commercial Bank had around $470 million.

Simon Charlton, AHAB’s acting Chief Executive Officer, said that following the court’s decision, the firm will start to form a new creditors’ committee and propose a revised restructuring proposal to claimants.


RELATED STORIES: Standard Chartered BNP Paribas Mashreq Bank Emirates NBD Bank Abu Dhabi Commercial Bank AHAB Saad Group Citigroup





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