HSBC Holdings is the largest known creditor to IFFCO Group, with exposure of approximately $400 million to the United Arab Emirates consumer goods company, people familiar with the situation said. IFFCO is working to restructure about $2 billion of debt, and the reported exposure places HSBC at the top of the creditor list.
IFFCO Group, a major Middle East manufacturer and distributor of products including cooking oils, biscuits and personal care items, has spent months engaged in efforts to renegotiate its liabilities. Those discussions did not produce an agreement, according to the people briefed on the matter.
After negotiations stalled, a group of creditors filed insolvency petitions, the people said. The individuals who provided the details declined to be identified, citing the private nature of the information.
Dubai-based Emirates NBD Bank PJSC is another significant lender to IFFCO. Some of the people familiar with the restructuring said Emirates NBD has reduced its exposure to a level just above $100 million. The same sources said it is unclear whether HSBC has similarly cut its exposure in recent weeks.
Requests for comment to representatives of HSBC and Emirates NBD were not answered. IFFCO did not respond to requests for comment.
Context and next steps
The account from the people familiar with the restructuring lays out the current positions of two major banks relative to IFFCO’s outstanding borrowings, but it leaves several questions open. The magnitude of HSBC’s reported exposure highlights the potential implications for large lenders when corporate restructurings involve multibillion-dollar debt loads. At the same time, the actions of other creditors, such as filing insolvency petitions, indicate a breakdown in negotiations that now has moved the dispute into a legal channel.
The available information does not specify whether further creditor actions, additional reductions in bank exposures or formal insolvency proceedings against IFFCO will follow. The lack of comment from the parties involved means that public details remain limited.
Disclosure
No additional disclosures were provided by the sources cited in the available reporting.