Al Jaber, an entrepreneur with interests in various industries, has struggled since taking on debt following a property crisis in the UAE and began talks with creditors in 2011.
Abu Dhabi Commercial Bank, which works as a restructuring and security officer, said in a document dated September 21 which was seen by Reuters, that it had received instructions from the majority of creditors to pursue the claims against Al Jaber.
A representative for Al Jaber did not immediately respond to a request or comment. ADCB declined to comment.
The move follows delays in restructuring deals, under which Al Jaber was to appoint a new board of directors and sell companies and assets such as Shangri-La hotels in Dubai and Abu Dhabi.
In return, the creditors had agreed to extend the maturity of a 5.9 billion dirhams ($ 1.61 billion) loan, cut interest rates and provide additional revolving debt.
The initial enforcement measure currently being pursued by creditors includes “accelerating and demanding payment of unpaid amounts” as part of the previously agreed debt restructuring, a source familiar with the matter said.
The execution will also allow creditors to claim against the president of Al Jaber a loan of 4.5 billion dirhams to the company.
Several UAE firms have sought to extend debt maturities or agree better terms in recent years to avoid defaults, after a drop in oil prices hit energy services and construction.
The coronavirus crisis has added to the strain and Arabtec Holding, the UAE’s largest listed contractor, will discuss options this week, including disbandment after the pandemic hits projects and resulted in additional costs.
Meanwhile, Dubai-listed construction company Drake & Scull is working to come to an agreement with its creditors in an out-of-court process.