Riyadh: Saudi steelmaker Al Tuwairqi Group has signed a 7.5 billion riyal (Dh6.9 billion) debt restructuring of bank loans. Final documentation for the restructuring has been signed by a group of 18 banks, mainly Saudi local banks, according to a press release issued after the signing ceremony.
Dr Hilal Al Tuwairqi, chairman of the board of directors of the Riyadh-based group, said the agreement would enable the group to get out of its current financial troubles, which are a fallout of the global economic downturn.
Dr Robert Eid, managing director and CEO of the Arab National Bank, which led the negotiations on behalf of the banking group, said a major chunk of the loan would be made available by Saudi banks.
The deal is regarded as the largest debt restructuring to be completed so far, not only in Saudi Arabia but also in the Middle East, according to the press statement.
The restructuring has been in the works since late 2008 after Al Ittefaq Steel Products, a unit of Al Tuwairqi Group, took a hit from a sharp drop in steel prices.
Dr Eid, who is also a member of the board of directors of ANB, described the agreement as a pride for the Saudi banking sector as it satisfies all concerned parties and without a loss for any of them. Addressing a press conference after signing the agreement, Eid said the deal would help improve the financial condition of Al Tuwairqi Group.
"It would enable the group to function well in addition to encourage it to explore avenues of further expansion," he said.
According to Eid, there has been no coordination with the Saudi Arabian Monetary Agency (SAMA), the central bank, with regard to signing the debt restructuring deal.
"This shows the freedom enjoyed by the Saudi local banks in having transactions with their clients," he added.
Dr Al Tuwairqi said his group was not in need of negotiating with the group of banks with regard to any concessions. "On the contrary, we reiterated our commitment to fulfill the rights of each bank, and that facilitated the deal in a smooth way," he said. Dr Al Tuwairqi said the financial loss incurred by his group as a fallout of the global financial crisis was the reason for its failure to settle its debts on time.
The group of banks involved in the deal included 10 Saudi banks. They are the Arab National Bank, Al Rajhi Bank, Samba, National Commercial Bank, Saudi Investment Bank, SAAB, Saudi Fransi Bank, Riyadh Bank, Al Jazira Bank and Saudi Hollandi Bank while the foreign banks are HSBC, National Bank of Kuwait, Standard Chartered, State Bank of India, Arab Bank, Gulf International Bank, Al Baraka Bank, and Arabian Banking Corporation.