A direct loan of Dh245 million (US$66.7m) by Abu Dhabi Islamic Bank (ADIB) to the Saad Group, the troubled Saudi conglomerate, sheds light for the first time on an elusive side of Saad’s borrowings: its use of bank finance to make investments, many of which declined in value during the financial crisis.
ADIB lent the money to Saad in 2007 to finance an investment in Makhazen Industrial Investments, a warehousing company in Abu Dhabi that never started operations, according to a document obtained by The National and verified by sources familiar with the deal.
ADIB’s exposure to the group, combined with a previously reported debt of $40m, is smaller than those of many other banks in the UAE, including Abu Dhabi Commercial Bank and the Dubai-based Mashreqbank. These loans also pale in comparison to Saad’s overall debt load, which has been estimated at $20 billion.
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