For example, Saudi Arabia, the region's biggest economy, introduced a bankruptcy law in 2018 and the United Arab Emirates enacted one in 2016 and amended it in 2020.
On Tuesday, U.S. hedge fund Davidson Kempner said that
investment funds it advises have acquired a non-performing loans
portfolio from the United Arab Emirates' Abu Dhabi Commercial
Bank worth 4.2 billion dirhams ($1.14 billion).
Executives from distressed debt investors SC Lowy and Fidera
have also said they plan to set up a presence in the UAE this
year.
"Historically, the sellers of debt have been foreign banks,
but local banks are beginning to understand the opportunity to
get rid of some of the debt on their books," Dilip Massand,
chief executive officer of UAE-based Phoenix Advisors, earlier
told Reuters.
"The learning curve is the pricing, and the matching of
expectations between the buyers and the sellers," Massand said.
About $60 billion in Gulf corporate debt is due to mature in
the next three years, about 80% in the UAE and Saudi Arabia,
according to Samar Haydar, head of GCC corporates at Fitch
Ratings.
Berkay Oncel, head of investments for the Middle East at SC
Lowy, has told Reuters his firm is looking at various
opportunities in the region.
"Banks are becoming more proactive in managing their loan
books and we are seeing more interest to explore secondary
market alternatives rather than legal enforcement," Oncel said.
($1 = 3.6729 UAE dirham) (Reporting by Yousef Saba and Rachna Uppal; Editing by Sharon Singleton)
