Privately held Saad Group of Saudi Arabia said yesterday it is making progress with a restructuring plan but declined to comment on a sale earlier in the day of a stake in the United Kingdom's builder Berkeley.
"We have no comment to make on individual transactions. We are continuing to make progress with the restructuring plan announced last week and will update further in due course," said a London-based spokesman on behalf of Saad Group.
Berkeley Group said on Tuesday that it understands Saad Group sold 16 million shares in the firm at 701 pence each.
Saad Group said last week said it would restructure its debt after it ran into unspecified difficulties and the Saudi central bank froze the accounts of its billionaire Chairman Maan Al Sanea.
Meanwhile, Kuwait Finance House, the country's biggest Islamic lender, said it has minimal exposure to the two troubled Saudi firms.
"I tried to do some kind of calculation. It is not even 0.1 per cent of our total credit portfolio," Emad Yousef Al Monayea, Managing Director, Kuwait Finance's subsidiary, Liquidity House, told reporters. "We used to have good exposure but we did reduce that."
Saad's woes have rattled a $30 billion (Dh110.1bn) empire built by Al Sanea, and represent one of the biggest defaults to hit the Gulf since the onset of the crisis.
In addition, Ahmad Hamad Al Gosaibi Group is restructuring an unspecified amount of debt. Troubles at both firms have rocked investor confidence and raised questions about the regulation and transparency of Saudi financial markets.
Al Monayea said global sukuk issuance this year was expected to top 2008's $14bn but would not equal 2007, when issuance hit a record $46.7bn, said the Islamic Finance Information Service.
"I believe that the sukuk market is building its momentum, coming back but with more solid ground," he said during a visit to the Malaysian capital.
He cited strong demand for Indonesia's $650 million global Islamic bond in April and Bahrain's upcoming issuance. "Still there is no full recovery, the storm has not permanently settled. We wish that we do not be surprised with any kind of new issues," he said.
Sales of Islamic bonds have slumped worldwide due to the global economic and financial crisis, and corporates are looking to sovereign issues to help them gauge investors' appetite.
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