DUBAI — Saudi Arabia’s reforms have improved the ease of doing business in the Kingdom, Dr. Fahad Alshathri, Deputy Governor – Supervision, Saudi Arabian Monetary Authority (SAMA), said.

Delivering the opening keynote address at the second edition of the Corporate Restructuring Summit held in Dubai on Thursday, Alshathri stressed on the need for regulators to proactively manage problem debt in a systematic, proactive and focused approach, saying “it is important to use robust debt restructuring processes to ensure the survival of businesses. Avoiding bankruptcies of potentially viable businesses will not only help preserve jobs in our region, but can also be a driver of economic growth.”

He noted “corporates and banks need to work together in this process. We as regulators would also need to play a key role in ensuring international best practices in the restructuring of problem debts,” adding that “I am confident that this summit will go a long way in helping come up with practical solutions to tackle identified problems in this area.”

In his presentation on how sound corporate governance regime can facilitate financial restructuring to effectively manage insolvency and optimize region’s investment climate, Dr. Obaid Al Zaabi, Chief Executive Officer, Securities and Commodities Authority, Vice Chairman, Financial Restructuring Committee, said “sound corporate governance plays a pivotal role in mitigating corporate insolvency resulting from financial crimes and mismanagement. While significant progress has been achieved over the past decade in establishing governance frameworks for listed companies in particular, and especially in countries with large capital markets, progress in improving governance of privately-held family firms has been noticeably slower. As a result, the quality of governance practices displayed by privately-held firms in the MENA Region varies significantly. While some have embraced a culture of better governance, others are remaining with practices that are dangerously ill-suited to the Region’s increasingly complex and globally-integrated economic environment. Financing, legal and ownership structures, board composition and transparency and disclosure makes implementing sound principles of corporate governance a challenging task in MENA region.”

Al Zaabi further said "SCA also scrutinizes applications of companies which intends to list through an IPO as green field and raise funds from public. To ensure adequate disclosure and investor protection and to help investors build better confidence that these organizations do not fall into distressed financial categories leading to complex financial problems at the time of listing. With the intent of improving investor transparency, another key proposal by SCA has been to issue draft regulations for setting up a secondary platform on the exchange which will host unprofitable companies. Such companies are required provide a restructuring plan and will be monitored in the watchlist."

Martin Tidestrom, Business Development Director, Abu Dhabi Global Market (ADGM), in his presentation that focused on bolstering economic growth in the MENA by fostering conducive environment for doing business, said “aiming to bolster economic growth and provide a conducive business environment, ADGM has built up an international legal environment with independent Courts and a strong community of financial, professional services and corporates across industries. With legislation including Insolvency and Bank Recovery and Resolutions regulations, in a clear rescue- and rehabilitation culture, ADGM provides an enabling platform for corporate and debt restructure. We find the Corporate Restructuring Summit an excellent forum to discuss trends, needs, challenges and best practices with other regulators, banks and practitioners.”

Klaus Froehlich, former chief financial officer, Saudi BinLadin Group, shared his insights as part of the panel on “Corporate Restructuring: Strategic Planning to Facilitate Successful Organization-wide Restructuring and Operational Optimization”, said “the conference was well run and informative and saw high-caliber attendance, a good mix between the financial services industry - advisors, regulators and some corporate practitioners. The occurrence of a summit like this shows a realization that issues exist and this is the first step toward the resolution of such issues. It is imperative for corporates to plan in advance for potential downturns rather than simply reacting to them. This platform should give a good push to improve transparency and trust between the various stakeholders especially given the recent regulatory push such as the bankruptcy law in KSA that aims to promote a conducive business environment in the region.”

The summit also saw an Exclusive C-suite Panel focusing on Billion Dollar Plus Restructuring: Analyzing Some of MENA’s largest insolvency workouts that featured insights from leaders from Ahmad Hamad Algosaibi & Brothers, Gulf Aluminium Rolling Mill B.S.C. (GARMCO) & S&P Global Ratings. Basim AlSaie, Chairman of Board of Directors, GARMCO, said “some countries in the GCC have come up with new and updated bankruptcy and reorganization laws, while some others are in the process. The most challenging issues are not the laws, but how well are the legal systems are being prepared to deal with the new laws.”

The two-day summit was chaired by May Nasrallah, Executive Chairman, deNovo Corporate Advisors & Richard Hinchley, Chief Risk Officer, the Saudi British Bank (SABB) and key highlights included the Exclusive Regulators’ Panel on Driving economic growth via FDIs, M&As and minimizing bad debt portfolios that featured insights from Majed Al-Rasheed, Secretary General, Bankruptcy Commission; Buthaina Amin, Director of Legal Affairs, Bahrain Economic Development Board; Adnan Ahmed Yousif, President & Chief Executive, Al Baraka Banking Group & Chairman, Bahrain Association of Banks and was moderated by Tarek A. Mogharbel, Executive Director & Senior Country Counsel, JP Morgan Chase, NA & The CEO’s Panel on Improving Profitability, Capital adequacy & Risk mitigation to drive Sustainable, long-term growth; Discussing scope of strategic Mergers & Consolidations that featured insights from Dr. Shujaat Nadeem, Deputy Chief Executive Officer for Business, Samba Financial Group& Chairman, Samba Pakistan; Dr. Bernd van Linder, Chief Executive Officer, Commercial Bank of Dubai and was moderated by Ziad Daoud, Chief Middle East Economist, Bloomberg Economics.

Other key highlights at the summit included Exclusive Presentations by International Finance Corporation (IFC) Financial Institutions Group, Abu Dhabi Global Market (ADGM), Emirates NBD & Roland Berger, an Exclusive Interview focusing on The collapse of the largest private equity firm in MENASA and a host of panel sessions focused on Managing NPL portfolios & driving down regional average; the anatomy of successful multi-billion dollar syndicated loans’ workout & Distressed Investing & NPL-servicing platforms, among others.

The Summit brought over 200 prominent banks, corporates, legal-advisory firms, hedge funds, investment banks and debt restructuring specialists from across the MENA onto one platform by spearheading actionable debate, impactful change and high-level outcomes. Partners at CRS 2019 included: Resolute Asset Management, Eyad Reda Law Firm, AlixPartners, Brown Rudnick LLP, Roland Berger, Kroll, Deloitte Middle East, PwC Middle East & Omni Bridgeway. The summit’s Bankruptcy Regulatory Partner was Bankruptcy Commission, Association Partner was Saudi Banks while the Supporting Partners were Bahrain Association of Banks & Saudi Credit Bureau (SIMAH). CNBC Arabia was the Official Broadcast Partner. — SG