Citicorp Trustee Co. Ltd., trustee for a $650 million Islamic bond sold by a unit of Saudi Arabia's Saad Trading, Contracting and Financial Services Co., said investors agreed to dissolve the trust after the unit defaulted on the debt. Citicorp said in August the trust will be closed if holders of the bonds who represent at least 25 percent of the aggregate value of debt outstanding voted for it. The dissolution may allow investors to claim assets used to back the Islamic securities sold in May 2007 by Saad Group's Golden Belt 1 Sukuk Co. BSC. Saad Group, the business owned by Maan Al-Sanea, said in June it was restructuring debt after a “short-term liquidity squeeze.” It owes at least $6.5 billion of syndicated loans to almost 60 banks, according to documents provided by lenders. The Al-Khobar-based group is among Gulf companies seeking to restructure debt after the global economic crisis dried up financing. Dubai World is negotiating with lenders to restructure $24.8 billion of debt after roiling global markets by proposing a freeze on loan repayments in November. Saad sold the five-year Sukuk to help finance investments and property purchases in London and Saudi Arabia. The notes were structured around land in Saudi Arabia that was leased to a special purpose vehicle, the Bahrain-based Golden Belt 1 Sukuk Co., according to Moody's Investors Service in April 2007. London-based Citicorp said it “intends to take no steps to dissolve the trust until is it has been so indemnified,” according to a statement dated April 23. The Islamic notes have traded around 19.5 cents on the dollar in the last week, according to prices from BNP Paribas SA. At least 25 percent of creditors had to request that the Golden Belt 1 Sukuk be dissolved.
