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Algosaibi, Lehman RBS Claim, Fjordbank Mors Sale: Bankruptcy

HSBC Holdings Plc (HSBA) won priority for repayment over BNP Paribas (BNP) SA and five other banks in a U.K. lawsuit seeking at least $250 million from Saudi Arabia’s Algosaibi family and their company, which defaulted in 2009.

Priority for repayment from Ahmad Hamad Algosaibi & Brothers Co. relates to five apartments allegedly owned by the family and is contingent on HSBC’s so-called charging orders against the company being finalized, judge Julian Flaux ruled in the High Court in London. A trial over the apartments in London’s Mayfair neighborhood is scheduled for Nov. 28.

“HSBC will have priority over the opposing banks in the event that the charging orders are made final,” Flaux said in the judgment. HSBC was first to apply for an interest in the apartments after the bank’s legal advisers discovered the properties by examining Algosaibi documents, Flaux said.

Algosaibi, with interests including construction, beverage- bottling and finance, admitted liability in the matter in June and hasn’t said how or when it will repay the banks in the case or dozens of other lenders seeking repayment. The case includes HSBC’s $85 million claim, British Arab Commercial Bank Ltd.’s $19 million claim, Arab Banking Corp.’s claims totaling $140 million and Credit Agricole SA (ACA)’s $6 million claim.

The case is part of a global dispute between Algosaibi and one of Saudi Arabia’s richest men, Maan al-Sanea, who married into the Algosaibi family and founded the Saad Group, which has businesses ranging from construction to health care. Units of Saad and Algosaibi defaulted after borrowing about $15.7 billion from more than 80 banks.

The other banks in the case argued that if they weren’t given an equal share of the apartments with HSBC, they may not recover anything from Algosaibi due to the difficulty of enforcing rulings in Saudi Arabia and “the unlikelihood of assets being available elsewhere,” according to the judgment.

RBS Renews $346 Million Fight With Lehman Brokerage Over Venue

Royal Bank of Scotland Group Plc (RBS) renewed a fight over a $346 million claim by Lehman Brothers Holdings Inc. (LEHMQ)’s brokerage, winning support from a district judge to file papers arguing the case should be moved from bankruptcy court.

The move follows a bankruptcy judge’s refusal to dismiss the case, according to court filings.

Separately, the New York-based former investment bank said creditors holding $140 billion in claims support its liquidation plan that will be considered for confirmation at a hearing on Dec. 6.

Jyske Bank Buys Parts of Failed Danish Lender Fjordbank Mors

Jyske Bank A/S said it agreed to buy parts of failed lender Fjordbank Mors A/S. Jyske Bank takes over a customer portfolio consisting of about 47,000 clients with total loans and advances of about 2.7 billion kroner ($491 million) and total deposits of about 3.7 billion kroner.

Aeon Bank to Take Over Failed Incubator Bank, Kyodo Says

Aeon Bank will take over failed Incubator Bank of Japan (8301), Kyodo News reported. Last year’s failure of the lender to small businesses triggered the government’s 10 million-yen ($130,000) cap on deposit insurance for the first time in 40 years.

Sevan Marine Agrees to Sell Oil Production Units to Teekay

Sevan Marine ASA (SEVAN), the Norwegian maker of floating oil- production and storage vessels, agreed to sell three of its vessels to Teekay Corp. (TK) in an effort to avoid bankruptcy. The shares surged as much as 87 percent.

Teekay will also buy an equity stake, Arendal-based Sevan Marine said in a statement. Teekay will acquire three floating production, storage and offloading units, along with their charter contracts and finance the completion of the Sevan Voyageur upgrade. The financial terms are expected to be released next week, Hamilton, Bermuda-based Teekay said in a separate statement.

“The proposed transaction with Teekay represents a good solution for all stakeholders,” Sevan Marine Chief Executive Officer Carl Lieungh said in the statement. “We will also preserve our leading engineering and design capabilities and intellectual property,” he said.

The company has struggled with larger-than-expected maintenance costs on its Sevan Voyageur production and storage vessel, which are expected to reach $190 million, compared with an earlier $135 million forecast. The company reached an agreement with bondholders in July to defer interest payments until the end of September to negotiate a debt restructuring.

Tepco Faces ‘Zombie’ Future as Fukushima Damage Claims Mount

Tokyo Electric Power Co., which faces damages of at least 4.5 trillion yen ($59 billion) for the Fukushima nuclear disaster, may be consigned to a future as a “zombie company” requiring constant government funding.

The estimate is contained in a report from a panel reviewing finances at the Japanese utility known as Tepco, the Yomiuri newspaper said. The government is trying to avert the bankruptcy of a company that supplies power to 29 million customers as it pays for the worst nuclear disaster in 25 years.

“Significant financial resources for compensation can be extracted if they liquidate Tepco,” Yoshimi Watanabe, the head of Japan’s opposition Your Party, said in an interview. “The government isn’t doing this. It’s simply writing a check for the compensation body, to be funded by higher electricity bills and taxes. Tepco will ultimately be a zombie company.”

The term zombie company is a throwback to the 1990s when the Japan’s asset bubble burst and large corporations avoided bankruptcy by being kept alive with loans from banks that also held their stock. Tepco, which has reported losses of 1.8 trillion yen, must also find funds to pay for decommissioning and clean up costs after the March earthquake and tsunami caused three reactor meltdowns at its Fukushima Dai-Ichi plant.

The oversight panel is due to present its report next week to the Cabinet of Prime Minister Yoshihiko Noda and the findings will form the basis of a plan to be drafted by Tepco and the Nuclear Damage Compensation Facilitation Corp.

To contact the reporter on this story: Lindsay Fortado in London at lfortado@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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