Saudi Arabia's cabinet approved the country's first modern bankruptcy law, supporting a government bid to attract more investors and restructure its oil-dependent economy, Reuters reported, quoting sources familiar with the matter as saying Feb. 18.

The new law is intended to help companies with debt restructuring and create a more investor-friendly climate ahead of the government's planned multibillion asset sales in 2018 such as the Saudi Aramco IPO, set to be the largest ever in history, the report said.

King Salman endorsed the bankruptcy law after the cabinet's approval, the sources reportedly said, citing a document dated last week. It was not clear when the law would take effect. The Ministry of Commerce and Investment did not immediately respond to Reuters' request for comment.

In December 2017, Saudi Arabia's Shura Council, a top government advisory body, approved a draft of the bankruptcy law which regulates procedures such as settlements and liquidation for individuals as well as local and foreign firms. While the law's framework has not been made public, an earlier draft version contained a provision where at least two-thirds of creditors could approve a debt restructuring deal, the Reuters report said.

That same month, Commerce and Investment Minister Majid Al-Qasabi said he expected a bankruptcy law to be passed in about three months while other laws for commercial asset-based financing and franchising should be approved in six months as the government sought to restore investor confidence in Saudi Arabia.