To Repay Creditors, Saudi To Auction Billionaire's Assets In December

Saudi Arabia will start auctioning real estate assets of billionaire Maan al-Sanea and his company on December 2 to help repay billions of dollars due to creditors, sources familiar with the matter told news agency Reuters.

The auction, originally planned for late October in the city of Khobar in Eastern Province, was delayed by a last-ditch attempt to reach a settlement, which failed to gain enough support from creditors, one source said.

Sanea, once ranked among the world's 100 richest people by Forbes, was detained last year for unpaid debts dating back to 2009 when his company, Saad Group, defaulted.

Creditors have spent the past nine years pursuing Saad for debt repayment in what is Saudi Arabia's longest-running debt dispute.

The case is separate from the scores of Saudi businessmen and prominent figures who were held on corruption charges last year at Riyadh's Ritz-Carlton Hotel, although it touches on similar investor concerns about corporate governance.

Local, regional and international banks eligible for a settlement have claims totalling 16 billion riyals, with international banks such as BNP Paribas and Citi, and regional lenders such as Mashreq, having claims of over 1 billion riyals each, sources told news agency Reuters previously.

Etqaan Alliance, the consortium appointed to resolve the dispute, will sell the assets at five auctions in the Eastern Province, Riyadh, Jeddah and Yanbu in the coming months. They could raise up to two billion riyals ($533 million), covering 10 to 15 percent of total debt, the sources said.

Proceeds from the first auction - of undeveloped and commercial land plots and income-generating residential buildings in Khobar and Dammam - are estimated at around 190 million riyals.

In March, Etqaan auctioned some 900 vehicles owned by Saad Group, raising around 125 million riyals to repay creditors, including unpaid workers.

It is unclear whether Sanea, who remains detained in Khobar, will be released after his assets are sold. One source said that Saad Group may file for bankruptcy after the auctions.

Saad, with interests spanning banking to healthcare, defaulted in 2009 with Ahmad Hamad al-Gosaibi and Brothers (AHAB), leaving banks with unpaid debt of about $22 billion in what was Saudi Arabia's biggest financial meltdown.

Some observers estimate Saad's total debt at 40 billion to 60 billion riyals.