Mashreq bank is owed more than US$400 million (Dh1.47 billion) by the troubled Saudi conglomerate Ahmad Hamad Al Gosaibi and Brothers (AHAB), according to a letter the bank sent demanding repayment. The revelation marks the first time full details about a UAE bank's exposure to Al Gosaibi have been made public.
The Dubai-based lender included the letter, written on May 20, as an exhibit in a New York court case against the Al Gosaibi group, a family-owned firm that has defaulted on its financial obligations and is in the middle of a sweeping debt restructuring.
Mashreq confirmed its $400m exposure to AHAB in a statement yesterday, saying the figure included a combination of $225m in currency swaps, loans in which multiple banks took part and direct loans to the group.
"Mashreq's total exposure to AHAB and related parties is approximately $400m, which includes the $225m in foreign exchange transactions on which AHAB defaulted in violation of its agreements with Mashreq and for which Mashreq filed claims against AHAB in New York" a bank spokesman said.
The scale of the exposure was "manageable relative to our size and strength", he added.
Mashreq is alleging in its New York court case that AHAB defaulted on a pair of currency swap agreements in April and May that were collectively worth $225m, and submitted the letter to show it had alerted AHAB to that fact. The case is being heard in New York because the transactions were routed through banks there.
Many banks have resisted quantifying their exposure to Al Gosaibi and the Saad Group, another struggling Saudi family-owned conglomerate.
Analysts have been watching keenly for clues on how indebted the AHAB and Saad groups are to banks in the region. While they do not see the defaults at the two conglomerates as a threat to the Gulf's banking system, they expect further declines in profits for banks as they set aside cash to deal with soured loans.
Already during the second quarter of this year, listed banks in the UAE collectively reported a 27 per cent decline in profits compared with the same period last year. They also registered a sharp rise in provisioning against expected loan defaults. Banks booked more than $1.3bn in provisions in the first half of the year.
Mashreq, which is listed on the Dubai Financial Market, reported about $87m in provisions during the first half of the year. Its second-quarter profits fell to Dh455m from Dh707m last year.
In addition to its exposures to AHAB, Mashreq is owed money by the Saad Group, according to a document circulating among bankers. Its total exposure to the Saad Group is $160m in syndicated loans.
Saad's billionaire founder, Maan al Sanea, has been accused by AHAB of fraud involving about $10bn.
afitch@thenational.ae
Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
COMPANY%20PROFILE
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Zayed Sustainability Prize
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
SPEC%20SHEET%3A%20APPLE%20IPAD%20(2022)
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COMPANY PROFILE
Name: Grubtech
Founders: Mohamed Al Fayed and Mohammed Hammedi
Launched: October 2019
Employees: 50
Financing stage: Seed round (raised $2 million)
The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
- Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
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Company%20profile
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COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
MEYDAN%20RACECARD
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How to tell if your child is being bullied at school
Sudden change in behaviour or displays higher levels of stress or anxiety
Shows signs of depression or isolation
Ability to sleep well diminishes
Academic performance begins to deteriorate
Changes in eating habits
Struggles to concentrate
Refuses to go to school
Behaviour changes and is aggressive towards siblings
Begins to use language they do not normally use
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
What is tokenisation?
Tokenisation refers to the issuance of a blockchain token, which represents a virtually tradable real, tangible asset. A tokenised asset is easily transferable, offers good liquidity, returns and is easily traded on the secondary markets.
Business Insights
- Canada and Mexico are significant energy suppliers to the US, providing the majority of oil and natural gas imports
- The introduction of tariffs could hinder the US's clean energy initiatives by raising input costs for materials like nickel
- US domestic suppliers might benefit from higher prices, but overall oil consumption is expected to decrease due to elevated costs
Copa del Rey
Barcelona v Real Madrid
Semi-final, first leg
Wednesday (midnight UAE)
SPECS
Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now
The specs
Engine: 2.0-litre 4-cyl
Power: 153hp at 6,000rpm
Torque: 200Nm at 4,000rpm
Transmission: 6-speed auto
Price: Dh99,000
On sale: now
Match statistics
Abu Dhabi Harlequins 36 Bahrain 32
Harlequins
Tries: Penalty 2, Stevenson, Teasdale, Semple
Cons: Stevenson 2
Pens: Stevenson
Bahrain
Tries: Wallace 2, Heath, Evans, Behan
Cons: Radley 2
Pen: Radley
Man of the match: Craig Nutt (Harlequins)
TWISTERS
Director: Lee Isaac Chung
Starring: Glen Powell, Daisy Edgar-Jones, Anthony Ramos
Rating: 2.5/5
COMPANY%20PROFILE%20
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Florence and the Machine – High as Hope
Three stars
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
HWJN
%3Cp%3EDirector%3A%20Yasir%20Alyasiri%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Baraa%20Alem%2C%20Nour%20Alkhadra%2C%20Alanoud%20Saud%3C%2Fp%3E%0A%3Cp%3ERating%3A%203%2F5%3C%2Fp%3E%0A%3Cp%3E%3C%2Fp%3E%0A
The%20specs
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