Construction contractor Al Jaber Group has missed a payment on its $4.5bn debt, news agency Reuters said on Tuesday citing thee sources familiar with the matter.
The installment missed at the end of March covered both the company’s debt and the interest due on it, said the sources who spoke on condition of anonymity.
Al Jaber had reportedly requested a halt to repayments so that fresh terms could be negotiated and promised to put a new debt proposal to creditors at a meeting scheduled for the end of April, Reuters said.
The company secured a debt restructuring in 2014 but approached creditors last year about refinancing the debt again to take advantage of cheap liquidity. However since then market conditions have deteriorated, the report added.
A spokesman for Al Jaber declined to comment.
The sources said the upcoming negotiations could be the last chance to save the company from collapse, a scenario that could send shockwaves through the local economy.
They added that creditors would probably demand a number of concessions in return, including potential asset sales, an injection of new cash into the group and swapping some of the debt for an equity stake in Al Jaber. Debt for equity swaps are extremely rare in the Gulf.