Ahmad Hamad Algosaibi & Brothers (AHAB) has agreed terms of engagement with the steering committee established to facilitate settlement discussions and negotiations with an overwhelming number of financial institutions with claims against the company.

“We are determined to make this settlement process work, and the formal establishment of the steering committee is a key step in advancing the negotiations with these institutions,” said AHAB acting chief executive Simon Charlton, reported the Gulf Daily News (GDN), our sister publication.

“We have been working with them and we can now begin the discussions that we hope will lead to agreed settlement terms.”

At a meeting in Dubai on May 7, AHAB's management outlined a proposed settlement structure to maximise recoveries for the financial institutions, and to end the five-year stalemate.

Since the meeting, the parties have been engaged in dialogue to establish a process within which negotiations can take place.

Subsequent to the meeting in Dubai, a steering committee was formed to facilitate discussions and negotiations between AHAB and the collective group of financial institutions relating to the settlement process.

The committee comprises representatives from five institutions, and includes a mix of GCC and international financial institutions.

As many as 87 of 108 identified claimants, representing approximately 59 per cent of the overall debt (and approximately 89 per cent of debt claimed by non-Saudi institutions), are now formally engaged in the process or have expressed an interest to do so.

It is hoped that this process will result in the settlement of all of AHAB's outstanding debt/claims.

The steering committee has appointed Houlihan Lokey and Allen & Overy to serve as the financial and legal advisers in the settlement negotiations between the two groups.

Both firms will report directly to the creditors' steering committee and lead efforts to develop heads of terms, value assets, and perform due diligence activities.

“Nearly every non-Saudi bank is now involved in the process, and we are encouraging the Saudi-based financial institutions to join as well,” said Charlton.

“We shall continue to work with the authorities and are confident that a pragmatic resolution can be achieved,” he added.

Bahrain-based Awal Bank and The International Banking Corporation (TIBC) have been in administration since mid-2009, sparking an international scramble by financial institutions to recover an estimated $22 billion from them and other entities.

Around 65 banks have reportedly filed lawsuits against AHAB in 10 countries in an attempt to recover their money, including seven banks in Bahrain owed between $300 million and $400 million.

However, AHAB claims it is the victim of an elaborate fraud and 13 former bank officials are currently standing trial in Bahrain's High Criminal Court on charges of corruption.

AHAB claims its debt was run up against its knowledge by TIBC, AHAB's Money Exchange and other businesses in Bahrain including Algosaibi Trading Services and Algosaibi Investment Holdings.

It has pointed the finger at Saudi citizen and Saad Group founder Maan Al Sanea, who married into the Algosaibi family and is among those facing criminal charges in Bahrain. - TradeArabia News Service