At a meeting with creditors earlier this month, AHAB reportedly offered creditors SAR 3 billion (US$ 800 million) of assets against debts of some SAR 26.3 billion (US$7.0 billion).
The Maktoob article above refers to an effective 8.6 cents on the dollar offer. A similar article from AlQabas.
I'm at a loss how this translates into 8.6 cents on the dollar. When I divide SAR3 billion by SAR $26.3 billion, I get 11.4% not 8.6% - unless there are a range of offers with 8.6 the lowest.
In any case this is probably just the first round of negotiations.
AHAB probably figured out that their creditors weren't going to bid them down. So what better place to start than low.
And starting at this level may well frame the negotiations to their advantage by shocking creditor expectations for recovery downwards. If creditors now get 22% or 23%, they will have doubled their recovery.
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