Saudi Arabia’s Azmeel Contracting & Construction Corporation has received court approval for its proposed 7.73 billion riyal ($2.06 billion) financial restructuring plan, closing a restructuring process that kicked off around two years ago.
Established in 1991, Azmeel Contracting & Construction Corporation has over the past three decades grown into one of the kingdom’s five biggest builders, mainly helping clients in the government and semi-governmental sector (oil and gas, industrials, infrastructure, residential and commercial sectors) with construction projects, repair and maintenance.
In October 2019, Azmeel entered formal bankruptcy proceedings when clients and some public and private entities made late payments, leading to debt that reached 7.73 billion riyals and an equity deficit of 2 billion riyals.
In response, Azmeel appointed Deloitte as its restructuring advisor tasked with preparing a business plan and a restructuring proposal compliant with the requirements of the financial restructuring procedure of Saudi Arabia’s bankruptcy law. King & Spalding was flown in to oversee the legal side of the financial restructuring.
Fast forward to the 4th of February 2022, and a major milestone was celebrated when the creditors of Azmeel approved the proposed restructuring plan of the debt pile – mainly through an issuance of perpetual Islamic bonds. The creditor group consisted of more than 10 banks including some of the largest in the kingdom 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. On the 13th of February, court approval was received.