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Rolls Royce, Hummer, among 923 vehicles on auction in Saudi at a discount

A whole bunch of high priced goodies, real estate and other luxury items will be auctioned off in Saudi the coming months.

These all belong to one person, a Saudi businessman who is being ued for billions and is currently languishing in jail in the Kingdom.

Billionaire Maan Al-Sanea, owner of Saad Group is also wanted in Bahrain where he has been sentenced to five years in jail in absentia for convictions including breaching central bank rules.

While he is detained, Al-Sanea is not part of the corruption probe that has so far netted Saudi authorities some $106bn in cash, assets and properties, some of which do need to be auctioned as well.

How different is this one?

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Billions for peanuts

In an exclusive, Reuters reported that Saudi authorities are preparing to auction billions of dollars of real estate and cars belonging to billionaire Maan al-Sanea and his company as they look to hasten an end to one of the kingdom’s longest-running debt disputes.

“The businessman, one of the world’s richest people, was detained by authorities late last year for unpaid debt dating back to 2009 when his company, Saad Group, defaulted on debts.

“Creditors have spent the past nine years pursuing Saad, a company carrying debt that some estimate to be between $10.8bn and $16bn.

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Liquidator and liquidated

Etqaan Alliance, the consortium appointed by Saudi authorities to liquidate assets owned by al-Sanea and Saad plans to begin selling the company’s assets in Saudi Arabia, according to several sources familiar with the matter telling Reuters.

The sales will happen in the coming weeks, the sources said.

The liquidator has produced a brochure accompanying the sale that includes a list of 20 plots of land owned by Saad Trading, part of Saad Group, and al-Sanea.

The largest property is a 484,407 sqm plot of land that includes buildings and a sewage water treatment plant.

“The brochure does not include valuations, but the sources said the real estate was valued at around $1.2bn.

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A source at the Ministry of Justice confirmed to Reuters an auction would be launched this month to sell vehicles, equipment, a large quantity of building materials and some property before Ramadan, which starts in May.

According to the sources who have seen the official list provided to authorities, Saad owns an estimated $0.96bn of real estate, while al-Sanea personally owns an estimated $1.8bn.

“Saad owns 923 vehicles, including trucks, buses and cars,” according to the sources who had seen the list provided to authorities, “while al-Sanea has 26 vehicles, including a Rolls Royce, a Hummer, and Cadillac Concord.”

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Destination of Proceeds

The sale does not include the 750-bed Saad Specialist Hospital in Khobar, which the government is in talks with private companies to run, or foreign assets owned by al-Sanea or Saad, according to Reuters.

“The proceeds from Etqaan’s auction will be distributed to creditors via a legal process overseen by a three-judge tribunal set up in 2016 to handle claims against Saad and Ahmad Hamad al-Gosaibi & Bros Co, another big local conglomerate that defaulted on debt in 2009.”

In an effort to stave off the liquidation process, Saad late last year launched its own process to engage with creditors.

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Settle offers

Saad hired a financial consultancy, Reemas Group, to offer a proposed settlement covering $4bn in debt.

In an email sent by Reemas last year, it told creditors its intention was to secure preliminary consent from the majority of lenders to its proposal to put the auction process at a halt.

Ahmad Hamad al-Gosaibi & Bros Co (AHAB) made a settlement offer which has the support of around two-thirds of investors, but there has been much less movement over Saad Group’s debts.

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According to Reuters, AHAB and Saad Group owe money to more than 100 international banks including HSBC, BNP Paribas and Citigroup, while Saad Group is also in debt to contractors including Germany’s Siemens AG and some 5000 former hospital staff.

A 3-judge tribunal set up in 2016 to deal with financial claims against AHAB and Saad group has approved creditor claims of about $3bn against AHAB.

According to the Daily Mail, the feud began the two parties fell on hard times after one of the banks owned by the family collapsed.

The head of the family accused al-Sanea of opening the bank – called the International Banking Corporation – without his consent, and of systematically defrauding the family and the bank’s customers.

“Since then the dispute between the Gosaibis and al-Sanea has played out in separate lawsuits in the Cayman Islands, Switzerland, Bahrain, the U.A.E., and other legal jurisdictions around the world,” said the daily.