Deloitte advises on restructuring transaction for one of Saudi Arabia’s largest construction firms
24 February 2022 - Deloitte was appointed by Azmeel Contracting & Construction Corporation as restructuring advisor to prepare a business plan, a restructuring proposal compliant with the requirements of the financial restructuring procedure of the Kingdom of Saudi Arabia (KSA) bankruptcy law, and support in restructuring more than SAR 7.73 billion (USD 2 billion) of debt.
This landmark transaction represents 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.
Azmeel Contracting & Construction Corporation was established in 1991 as a contracting business engaged in activities mainly comprising construction, repair and maintenance, as well as water facilities and sewage works. Between 2014 and 2018, Azmeel secured SAR 16.5 billion (USD 4.4 billion) worth of large-sized construction projects with prominent KSA government and semi-governmental entities across the oil and gas, industrials, infrastructure, residential and commercial sectors.
On 2 February 2022, Azmeel received majority approval from its creditors over its proposed restructuring plan. The creditor group consisted of 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 this complex and flagship 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,” said Labban.
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