The Saudi court’s ruling last month could provide a resolution to one of the Kingdom's longest-running debt sagas.
A Saudi court has approved an application by Saad Group to have their case resolved through Saudi Arabia's new bankruptcy law, reported Reuters.
Saad Group, with interests from banking to healthcare, defaulted together with another conglomerate, Ahmad Hamad Al-Gosaibi and Brothers (AHAB) in 2009, leaving banks with unpaid debts of about $22 billion.
A commercial court in Dammam is said to have approved an application for financial reorganisation under the terms of the Saudi bankruptcy law as well as appointing an independent trustee to oversee the process last month.
The Kingdom's bankruptcy law came into effect in August 2018 and is part of the government's efforts to make the Arab world's largest economy more attractive to investors. The law provides more options and regulates procedures such as settlements and liquidation.
Liquidation or cash injections were the main options for debt defaults until last year when the bankruptcy law was introduced.
Additionally, AHAB, the other defaulted conglomerate, applied to begin a protective settlement procedure under the bankruptcy law, but in January the Dammam commercial court rejected the filing saying the company had not provided all the information needed as part of the law and its regulations.