$2bn of Saudi-based Azmeel’s debt restructured says Deloitte

Azmeel was established in 1991 as a contracting business engaged in construction, repair and maintenance, as well as water facilities and sewage-works

Azmeel Contracting & Construction Corporation said Deloitte was its restructuring advisor and worked to prepare a business plan, a restructuring proposal compliant with the requirements of the financial restructuring procedure of Saudi Arabia’s bankruptcy law, and enabled it to restructure more than $2bn of its debt.

The transaction is said to represent a milestone within the KSA restructuring landscape, given the use of hybrid restructuring solutions including perpetual sukuks to recapitalise Azmeel’s balance sheet, while offering an attractive recovery plan to creditors, said a statement from Deloitte.

Early this month, Azmeel received majority approval from its creditors over its proposed restructuring plan being implemented in co-ordination with a creditor group comprising more than 10 banks including some of the largest in KSA along with 2,700 other creditors. The restructuring was undertaken under the supervision of a court-appointed bankruptcy trustee, and under the laws and regulations of the nascent KSA Bankruptcy Law.

Karim Labban, partner, Turnaround and Restructuring at Deloitte Middle East, led the transaction which has been anticipated to set a precedent on how restructuring solutions are addressed under the KSA Bankruptcy Law.

“We have built a leading turnaround and restructuring practice in KSA. Saudi Arabia has always been a focus market for us, and we are extremely proud and honoured to have advised on this landmark transaction. This is an example of how complex situations and challenges can be addressed through working closely with a supportive group of lenders and advisors to find the right balance and develop a win-win restructuring solution,” explained Labban.

Between 2014 and 2018, Azmeel said it had secured $4.4bn worth of large construction projects with prominent Saudi government and semi-governmental entities across the oil and gas, industrials, infrastructure, residential and commercial sectors.

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