Saudi Arabia’s Ahmad Hamad Algosaibi & Brothers (AHAB) and a steering committee, made up of five major creditors, have presented the detailed terms of the agreement to settle financial institutions’ claims against the company.

The firm also described the pathway to implementation. It has invited claimants to enter into a process to agree the amounts of their claims so that these may be presented to the judicial authorities in Saudi Arabia together with the settlement agreement. This will allow all parties to enter into a comprehensive settlement.

Speaking in Dubai on 28 January, Hamad Algosaibi, the son of the chairman of AHAB, said: “At all times throughout this process, AHAB and its partners have remained fully committed to complying with all royal orders and to the fair and equal treatment of all claimants. Today is an important milestone in the final resolution of this longstanding matter and AHAB looks forward to continuing to work with the authorities in Saudi Arabia and the claimants to implement the settlement.”

In connection with the comprehensive settlement, claims against AHAB will need to be presented to the appropriate judicial authorities in Saudi Arabia.

“We have now invited claimants to commence the process that will lead to the presentation of agreed claims to the judicial authorities in Saudi Arabia. We believe this is critical to the efficient and successful implementation of the settlement,” said Simon Charlton, acting CEO and chief restructuring officer at AHAB.

AHAB initiated settlement negotiations in May 2014 in order to open a productive dialogue with all claimants and to end five years of deadlocked litigation. A total of 93 of 113 identified claimants are now formally engaged in the process.

Background: The AH al-Gosaibi debt default

Saudi firms Ahmad Hamad Algosaibi & Brothers (AHAB) and the Saad Group defaulted on at least $15.7bn of debt in 2009, leaving banks across the Gulf, Europe and the US exposed.

One of the biggest corporate defaults in the Middle East to date, there are about 109 claimants chasing repayment.

The defaults were partly triggered by the onset of the financial crisis in the Gulf in 2009, which led to lenders calling in their loans.