The Deloitte Turnaround and Restructuring team’s plan receives court approval following approval from the majority of creditors for the restructuring of the KBBO Group
The case represents the first successful large scale complex restructuring under the jurisdiction of the recently adopted UAE Bankruptcy Law
Following months of diligent negotiations, Deloitte trustees comprising of Deloitte Turnaround and Restructuring Partners Paul Leggett and David Stark, along with a United Arab Emirates appointed trustee, Salem Ballama, have gained today court approval following the approval on 14 August 2023 from the majority of creditors for the KBBO Group and associated entities to be restructured under the UAE Bankruptcy Law.
The KBBO Group restructuring is the largest successful onshore bankruptcy case under the jurisdiction of the UAE Bankruptcy Law, which was introduced in late 2016. The KBBO Group restructuring includes 29 corporate applicants and two shareholders, and will be implemented in order to maximize the return for all of the creditors with AED 7 to 12 billion of claims, including multiple complex cross guarantee positions.
The KBBO Group dates back to 2008 and is a group of businesses and investments headquartered in the UAE, with operations in the wider MENA region. The KBBO Group is comprised of three groups; Emirates Hospital Group being an established set of companies and businesses which operate hospitals and clinics, the Consumer Products Group being a retail and consumer focused group holding a variety of brands with brand names including Freshly Frozen Foods, as well as Investments being the investment arm of the KBBO Group holding interests in a diverse range of sectors across different geographies.
The Emirates Hospital Group restructuring plan included elements such as, raising AED150 million super senior new money, the recapitalization of its balance sheet to align debt service capacity with debt commitments, along with an option to implement an asset disposal/rationalization plan. The prevention of liquidation for the Emirates Hospital Group has ensured continued access to medical care for the public, preserved 2000 jobs and benefitted the local economy through the continued operation of hospitals and clinics.
“Today marks an important milestone for the UAE Bankruptcy Law to successfully allow for the financial restructuring of an extremely complex transaction,” said Paul Leggett, Partner and Middle East Insolvency lead, Deloitte Turnaround & Restructuring team Dubai, Trustee of the KBBO Group.
“We expect the UAE Bankruptcy Law to be widely adopted in the years to come, and companies, bankers and their lawyers, should be encouraged to utilize the legal framework, particularly to circumvent some of the challenges of out-of-court restructurings and as an alternative to a liquidation process. After successfully leading the first high profile onshore bankruptcy case in the UAE I believe our team, which includes insolvency specialists, is the market leader and is uniquely positioned to support creditors and debtors in their use of the Bankruptcy Law to provide successful restructuring solutions,” added Leggett.