Saudi Arabia’s Saad Group has denied that it struck a deal over its debt obligations to Saudi banks in a letter sent to its creditors in mid-November.

In the letter Saad Group says “it is not a party to any settlement or agreement with the Saudi banks.”

The denial comes despite bankers in the kingdom confirming that a deal was struck in September, which included unsecured creditors agreeing to a take a 15 per cent cut in the size of the debts they are owed.

The deal was even confirmed by the governor of the Saudi Arabian Monetary Agency Muhammed al Jasser on 28 September. It covered several bilateral loans of an unknown quantity.

One banker in Saudi Arabia says Saad Group is playing a “dangerous game” by denying stories previously confirmed by government officials. He adds, “This whole affair is affecting the credibility of all Saudi corporates in the eyes of international banks.”

Banks in Saudi Arabia with secured loans to Saad Group have already begun exercising their security over certain assets, says another Riyadh-based banker. “In some cases banks have already started to sell assets they have security over to settle the loans,” says the banker.

The deal with Saudi banks had created a lot of concern amongst international creditors that a two stage restructuring process would leave them at the bottom of Saad’s creditors. International banks including France’s BNP Paribas, Deutsche Bank, the US’ JP Morgan and the UK’s Royal Bank of Scotland have exposure to Saad Group.

The letter also claims that Saad Group is considering launching legal action against several international banks, including the UK’s HSBC and the US’ Citigroup.

The letter says that these banks froze certain Saad accounts in May this year interfering with the companies ability to service its debts.

Saad Group is currently embroiled in a legal dispute with another Saudi conglomerate Ahmad Hamad al-Gosaibi & Brothers (AHAB). The two groups are estimated to owe a total of around 100 banks more than $20bn. AHAB has alleged that Saad’s chairman Maan al-Sanea was involved in a fraud that could amount to $10bn.

Saad Group says in the letter that it is planning to call a meeting of creditors who are not currently involved in litigation against it to work on a restructuring plan for its debts.

One banker at an international institution says the letter seems to be an attempt to prevent further litigation being launched against the Saad Group. “It seems that Saad is trying to urge the banks to forgo launching any legal claims in order to help it run a more orderly restructuring process,” says the banker.

France’s Societe Generale launched a legal claim against Saad Group in September. Saad Group did not respond to requests to comment.