A subsidiary of Saudi businessman Maan al-Sanea’s Saad Group defaulted on its latest repayment of a $650m sukuk on 15 November, the latest in a series of defaults by different subsidiaries of the Saudi conglomerate.
Saad Trading, Contracting & Financial Services issued the sukuk in 2007 through a subsidiary called the Golden Belt 1 Sukuk Company. It listed the debt on the Bahrain Stock Exchange.
In a statement to the exchange on 16 November, the Saad Group subsidiary said “freezing orders in Saudi Arabia and other jurisdictions have rendered impossible the ability of Saad Trading to perform its payment obligations”.
According to the statement, it “continues to exert every effort through the relevant legal processes to resolve these issues to be able to perform its obligations towards its creditors”.
The company also asked holders of the sukuk to refrain from legal action following the missed payment, “in order to avoid further complication and expense”.
Saad Group is currently engaged in legal proceedings with fellow Saudi conglomerate Ahmad Hamad al-Gosaibi & Brothers. As part of this case, in June, the Grand Court of the Cayman Islands froze $9.2bn of assets belonging to Al-Sanea.
The Al-Gosaibi group alleges that Al-Sanea perpetrated a massive fraud that resulted in the two groups defaulting on an estimated $20bn of debts in total in May.