Saudi Arabian family conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB) is offering creditors a minimum return of 28 cents on every dollar owed under an enhanced proposal to end one of the Middle East's largest ever debt restructurings.

The group with interests in hospitality, food and real estate among others, collapsed in 2009 along with Saad Group, a separate Saudi business empire led by Maan al-Sanea. Since then, the two have been battling over who was to blame for the issues affecting their conglomerates.

AHAB has around 22.5 billion riyals ($6 billion) in direct liabilities to banks and financial institutions, it disclosed in May 2014, when it made an initial offer to creditors of a minimum of 20 cents on every dollar owed.

The new proposal has been approved by a five-member committee charged with negotiating on behalf of creditors and it was outlined to the wider creditor group at a meeting in Dubai on Tuesday.

Under the plan, AHAB will offer a higher return by pledging a real estate portfolio worth 3.4 bln riyals to creditors and its minority stake in a joint venture firm in Saudi Arabia worth 300 million riyals, on top of an equities portfolio worth around 2.7 billion riyals, acting AHAB chief executive Simon Charlton told reporters on the sidelines of the meeting.

In the earlier proposal, AHAB's real estate assets were to be used as collateral for a minimum level of debt recoveries.

AHAB would then increase its return to creditors through potential recoveries from litigation against Sanea and companies controlled by him, Charlton said, as it had intended to under the existing plan.

Sanea and his lawyers have consistently rejected claims of wrongdoing made by AHAB.

The new proposal would see all potential recoveries up to 6 billion riyals given to creditors, with the split 70/30 in favour of creditors on amounts between 6-10 billion riyals and 60/40 in favour of creditors on any cash above 10 billion riyals in recoveries.

If potential recoveries don't reach 2.5 billion riyals within three years, AHAB loses control over the joint venture minority stake. However, if the firm achieves recoveries worth 5 billion riyals inside five years, AHAB will get back half the land portfolio.

At the point of agreement being completed with creditors, the partners in AHAB will disclose their personal assets to the creditor group, in an effort to enhance transparency over AHAB's finances, Charlton added.

The steering committee comprises Arab Banking Corp , BNP Paribas, Emirates NBD, Fortress Investment Group and Standard Chartered.-Reuters