Algosaibi bankruptcy deal highlights effective #Saudi reforms — Capital Economics

Algosaibi bankruptcy deal highlights effective Saudi reforms — Capital Economics

The recent deal involving one of Saudi Arabia’s largest conglomerates, Ahmad Hamad Algosaibi and Brothers, is a sign that government reforms are working, according to Capital Economics.

The group this week reached an agreement with 95 percent of its creditors to restructure $7.5 billion of its debts, after more than a decade in Saudi courts.

“Previously, debt restructurings were extremely difficult to achieve and there were no clear instructions of how insolvency should be treated,” James Swanston, a Middle East and North Africa economist at Capital Economics, wrote in a research note.

The bankruptcy law, and other more recent judicial reforms, were instrumental in settling the case, as many other firms have restructured debts since it was introduced in 2018, he said.