DUBAI: Abu Dhabi-based Al Jaber Group expects to seal a deal to restructure around 5.75 billion dirhams ($1.6 billion) in debt this month, a source at the company and other sources familiar with the matter said on Thursday.
Although the conglomerate, which was founded by the Al-Jaber family in 1970, has struggled since a downturn in construction hit the UAE after the global financial crisis, its outlook for 2018 onwards is positive, the company source told Reuters.
Al Jaber’s outlook has been boosted by expected wins of new construction projects in both Abu Dhabi and Dubai.
“We have concluded all commercial terms of the new deal and are about to sign with all the banks to receive 100 percent agreement imminently,” the company source said, adding that 97.5 percent of creditors had agreed so far.
Al Jaber’s debt is mostly held by local and international banks, although some hedge funds and other non-bank financial institutions also feature among the creditor group, sources familiar with the matter said.
Since completing a $4.5 billion debt restructuring in June 2014, Al Jaber, best known as a contractor but with interests in other sectors, has taken steps to sell non-core assets, including its 80 percent stake in construction joint venture ALEC to Investment Corporation of Dubai last year.
Such sales have helped to cut debt, with the reduction also boosted by increases in revenue, the sources said.
Under the new plan, the maturity of the debt will be extended by seven years to Sept. 30, 2024, with the company also required to continue to reduce it via quarterly repayments and further asset sales, the sources said.
It also includes a reduction in the interest rate on the debt and the removal of “payment in kind” accrued interest, while quarterly amortization payments will also be cut from March 2019, the company source said.
Al Jaber’s problems started in the mid-2000s when it borrowed to fund its drive to expand outside of its core business of construction.
The weight of the debt and a slowdown in the local market pushed it to begin talks with creditors in 2011. But the 2014 restructuring failed to ease Al Jaber’s troubles and in March 2016 it missed a repayment.
UAE’s Al Jaber Group close to $1.6bn debt restructuring
UAE’s Al Jaber Group close to $1.6bn debt restructuring
New Saudi draft project to regulate direct market entry of listed companies’ subsidiaries
RIYADH: The Saudi Capital Market Authority has launched a draft regulation for the direct listing of subsidiaries of companies already listed on the main market, inviting stakeholders to provide feedback over a 30-day period, according to a statement issued Feb. 26.
The proposed framework aims to allow subsidiaries of main-market companies to list their shares directly on the main market without undergoing an initial public offering, thereby shortening timelines, streamlining procedures, and reducing the costs associated with listing on the Saudi stock market.
It also seeks to create more investment opportunities in the Saudi financial market, contributing to market depth and product diversification, while maintaining high levels of transparency and protecting investors’ rights.
The proposals enable the issuer and its financial advisor to share information about the company and its financial statements with a select group of potential investors before obtaining CMA approval for the share registration request, allowing them to assess their interest in a direct listing on the main market.
They also allow a specific group of licensed financial advisory firms to prepare research and financial reports, provided these are not published before CMA approval.
The proposed framework emphasizes the importance of proper disclosure by setting out requirements for registering shares on the main market, including submitting a registration document to the CMA.
It also specifies the information that must be included in the registration document, such as the method for determining the reference share price and the risks associated with this method.
Under the draft regulation, securities offering rules, ongoing obligations, and the CMA’s glossary of terms and regulations will be updated to allow this type of listing.
This approach is expected to bring multiple benefits, including maximizing the overall value of the main market with lower risk by listing companies that have greater knowledge and experience of market regulations, as well as deepening the market by increasing the number of listed companies across multiple sectors.
