SAUDI ARABIA APPROVES BANKRUPTCY LAW

DUBAI/KHOBAR: Saudi Arabia's cabinet has approved a bankruptcy law, sources familiar with the matter said on Sunday, giving a boost to efforts to make Kingdom more enticing to investors.

MODERN BANKRUPTCY legislation does not currently exist in Saudi Arabia, creating difficulties for struggling companies, seeking to restructure debt and creditors since 2009 global financial crises and more recently, the dip in oil prices.

The kingdom is embarking on an intensive drive to overhaul its economy - including outdated laws -as it seeks to create an investor friendly climate to push through a multi-billion dollar pipeline of asset sales such as the 'initial public offering' of  Saudi Aramco, expected to be the world's largest public share.

''The timing is excellent,'' said Bader al-Busaies, managing at AI Suwaiket and AI Busaies law firm.

''Lots of companies are facing financial difficulties. Before it was either liquidation or stakeholders had to inject money. The new law is an alternative solution the  international practice has proven that insolvency law offers a good chance for companies.''

King Salman has endorsed the bankruptcy law after the cabinet approves it, the sources said, citing a document dated last week.

The Ministry of Commerce and Investment did not immediately respond to a request for comment, and it was not clear when the law would be promulgated and take effect.

Saudi Arabia's Shura Council, a top advisory body to the government, in December approved a draft of the law which consisted of 231 articles in 17 chapters.

It regulated bankruptcy procedures such as settlements and liquidation, for individuals as well as local and foreign companies, according to a government statement at the time.

[Agencies].