T.R.I. - Summary Remarks

foreign [Music] well to those of you who've stayed thank you very much it's a real pleasure to be here um 30 years ago yeah 30 30 years and six months ago I flew to Abu Dhabi as a newly qualified chartered accountant completely disillusioned with audit which I hated that was a very good question I'm interested to know who the big four auditor was um I signed uh I signed a waiver under release I signed an NDA which I think has expired although I hadn't checked and I was put into an unmarked building next to the um original Adia head office and we had armed guards on the door and bars on the windows I was never really sure if that was to keep us in or to keep creditors out um and there I was working on my first insolvency engagement in the Middle East um today um here we are with a dedicated stream to turn around restructuring and insolvency at Abu Dhabi Finance week and I think just that says an awful lot about how far we've come um I think the biggest the biggest shift and the biggest change is cultural and psychological 30 years ago you couldn't mention the words they were completely Haram bankruptcy wasn't talked about insolvency was something that people didn't do um now we have an environment where I think we have Regulators be it adgm difc the Saudi government sponsored by the ministry of Commerce um we have dedicated Professionals in the in the big four we have Boutique firms smaller firms medium-sized firms we have law firms who have dedicated restructuring professionals here even the banks have moved forward and rather than just dealing with a credit team you're dealing with workout professionals as well um I think the the fact that all of that is here has created an environment where now it's okay to discuss it and it's okay to to deal with those issues we've seen rafts of new legislation um across the region in Saudi Arabia in Bahrain in the UAE as I say we have dedicated professionals um the law firms the accounting firms we have not just new legislation but we have governments who are prepared to invest in educating judges training judges educating and training bankruptcy professionals who are prepared to take appointments as bankruptcy trustees and I think a point that came up earlier we've seen the secondary Market players move in and I I can promise you from our situation where probably our debt was about nine ten billion dollars over a third of that debt traded and had it not been for the secondary Market I'm not sure we would have achieved the success that we did um I'm sure that most of you have heard of alga Sabi and the Saad Group total liabilities claims across the world probably in excess of 40 billion dollars which I think makes it one of the largest defaults that occurred at the end of the global financial crisis I'm not going to get into the aspects of fraud that we allege because that's still a contentious point but I think if you go back to 2009 you had entities in Bahrain second and fourth largest banks you had businesses in Saudi Arabia and you had a global web of companies across the world built by the Saud group in Saudi Arabia in 2009 there was no enforcement law there was no bankruptcy law the alternative dispute resolution no arbitration law and there was a newly introduced Sama banking disputes committee so the time it probably looked impossible to resolve even a normal bankruptcy let alone such a complex and diverse situation that we had um Saudi Arabia ultimately introduced a bankruptcy law in late 2018 we worked with the ministry of Commerce and they were very open to dialogue and I think that is one of the key factors in any success for bankruptcy is you have to have a dialogue the parties have to talk they have to work together you're not always going to agree in fact probably you never will but if you don't have a dialogue and communicate it's not it's not going to work um even when they introduced that new law I still wasn't convinced that we were going to succeed because I was pretty skeptical as to whether a Sharia based legal system would enforce cram down against dissenting creditors particularly of those dissenting creditors were large Saudi National Banks I'm happy as we stand here today it did work and they did as I say the key factors clearly the law without that law we wouldn't have succeeded but not just the law but the will and the motivation of the regulators and I think we see that across the region I worked between that first event in 1992 and now for 30 years I've worked across the world in South America Argentina Panama North America Europe Asia on um insolvency type restructuring arrangements and I think what we've achieved here I would match up against those jurisdictions any day we can not just that but at significantly less cost I mean people will talk about how much money's been spent on the alga Sabian sard cases most of that was spent pre-bankruptcy law and it was as trying to maintain um ourselves in a position where we would ultimately be able to take take advantage of that as I say clearly the biggest Factor was the bankruptcy law the secondary Market was hugely important um I think we've seen more recently with the ADCB sale of their npl um you know the banks here are more willing to engage in a conversation doesn't mean they'll agree but at least there's a conversation and I think that that's really important and we filed so we filed in late 18 we were rejected we were rejected again ultimately admitted into a bankruptcy process in May 19 we pretty much lost a year due to covid were accepted by credit to vote 95 of the creditors voted in favor of our plan on the 7th of September 21 Court ratified that late September 21 and at this point we've returned over one and a quarter billion dollars to creditors which I think is just over 17 cents on the dollar which of course creditors want more I always tell people how do I know I've done a good job assuming that I have it's because everybody hates me the creditors want more the family think they should have paid less therefore job well done um I and as I said before I would I would put that up against any job I've done anywhere else in the world and particularly one that was this complex you know the allegations of fraud the web of companies across the world the sort of intra and extra jurisdictional factors made this particularly complicated and I think it says a lot about the will and motivation of the governments in this region that they've recognized the need to have a a viable working world-leading bankruptcy regime because you know it's like insurance right we all buy car insurance we don't want to crash our car but it can happen and if you want to attract inward investment if you want to be able to hold yourself out on the world stage as a leading Financial jurisdiction you have to be able to clean up the mess if it happens also you know there are viable businesses that get into difficulty and being able to save those is really important so you know I think one of our one of the things that that I'm most proud about is that we still have over 6 000 employees at Ahab and you know those people have multiple dependents in in multiple countries so being able to preserve that business return money to creditors um was was something that was really important to us and I think as we enter what is clearly going to be a difficult period for the world and hopefully the gulf will be somewhat insulated um there is going to be more distress and there's going to be more need for people to be able to work together bringing in the the professionals who are now based here with The Regulators with the authorities with the courts the judges the bankruptcy professionals the important role of the secondary Market um I think we're well placed here to cope with whatever difficulties may lay ahead and hopefully next year we'll be able to stand here and talk about more success under these new regimes so as I say thank you all for staying for those of you who did I'm happy to take some questions if people have any I I suspect there may be a couple your role was very much easier after the the bankruptcy do or you were doing let us say very good then you made perfect or it's a big change so it was before you were suffering let us say for 18 years or whatever yeah I mean I I need quite unique perhaps and the reason I was a debtor appointed cro um I would say from 2013 through 2018 the best I could do was keep them alive but I was never going to be able to reach a resolution the only Alternatives were endless value destructive litigation or unanimous consent and and getting 150 creditors to unanimously agree to a deal was was virtually impossible so I think without the implementation of that bankruptcy law um I would have that had been burying me in the desert there was I don't know a big talk about that you people you were let us say uh privileging the Saudi Banks rather than the overseas Banks I'm not sure how much that it's true but we were abroad we are and expecting that is happening how much that it's through and how much did that affect you already say relation with the specialty Banks uh out of Saudi Arabia you know we right from the outset um the family charged me with trying to find a resolution and we tried in 2009 we tried in 2010 um we were led to believe I'll put it like that in 2013 that doing a deal with the Saudi Banks was the right thing for us to do um that made me very uncomfortable um I think you need you know you you have to be fair and if the system's not fair you're not going to attract any FDI that's for sure I think very quickly after we'd been led to believe that we saw the Sama banking disputes committee starting to issue judgments for foreign Banks quickly after that we had the new enforcement law introduced and Banks were treated equally by that tribunal which was comforting so at that point we turned around to the Saudi Banks and said whatever it was you were led to believe we we can't do that um and as I say even when the law came in I was still skeptical would they actually cram down a dissenting Saudi creditor and they did um touchwood we're not finished but that that that there does seem to have been the political will to do that one last question from me if you allow me um I recall that when we Lodge our claim with the Hobart Court I think they were not recognizing their conventional loan I also only they were recognizing the Sharia compliance loans how much now the difference is there between Sharia and conventional and did they recognize later on or they say that no I mean I think we were I mean one of the one of the things under the bankruptcy law is you don't need a final judgment um the bankruptcy trustee will review the claims and he can recommend to the judge whether they be accepted we had Saudi claims Saudi judgments GCC judgments under treaty we had UK even a New York judgment and we even did I think we did 23 arbitrations in Under 12 months and all of those claims were admitted so I think that that was one of the more surprising elements that it wasn't a very strict you have to be a Saudi judgment in a Sharia Court they they considered all claims and I guess one of the other interesting factors was even after that when creditors thought okay I can't do anything in Saudi I'm going to try and do something in the UAE um the sort of reciprocity and comity between the courts in the GCC recognizing the laws was was really powerful to me thanks Simon and um thank you for all the work that uh you've done over the years and as creditors we obviously appreciate it but uh you made an interesting comment about the secondary participants role in the restructuring and reaching a conclusion and I thought it would be something interesting perhaps to expand upon I mean how would you think that the entrance of the secondary participants uh change the Dynamics and how did it lead to a resolution that uh we finally able to reach you know I mean I'm not going to pick on any specific group but I think everybody's moved forward so today we have better conversations with regional Banks than we had 10 years ago but 10 years ago um most of the GCC Banks they wouldn't talk to you um you couldn't have a conversation so getting the secondary players in getting it away from the credit side of the bank to work out people to people who understood um I I would say was after the introduction of the law and the political will it was the most important the most important factor in in our ability to succeed and I think over a third of our debt has now traded and you know the secondary Market is motivated differently right um they're also at least traditionally more expertise and experience in in workouts so I think it was critical so very happy to see that you're opening an office well I hope you all stay and enjoy Abu Dhabi those of you who live here thank you and for the um foreigners who've come in stay and enjoy the hospitality and enjoy the Formula One and hopefully Mercedes will win again thank you very much [Applause]