Islamic firm signs deal to revamp 62% of debt; Aayan to pay KD51m in cash to creditors
Kuwaiti Islamic firm Aayan Leasing and Investment Co on Monday signed a KD205m ($743.6m) debt restructuring deal with creditors.
This amount is 62 percent of the Aayar's total debts, it said in a statement.
The firm, which was hit during the global financial crisis, has signed an agreement with nine creditors, seven of which are local, including Kuwait Finance House , Burgan Bank and Gulf Bank .
According to the deal, the nine creditors will write off 10 percent of the 205 million dinars owed.
"Secondly, 15 percent of the debt will be transferred to shares in Aayan...and the firm's capital will be increased by KD10m through a rights issue for current shareholders...and Aayan will pay KD51m in cash for part of the debt," the firm said in the statement.
The remaining amount will be restructured over a period of five years, it added.
Aayan is one of a number of Kuwaiti Islamic investment firms that have struggled since the credit crunch. Others include Investment Dar and International Investment Group
Aayan said other creditors could also join the plan, which will be implemented by the end of September.
Trading in Aayan's shares has been halted since March 2010 after the firm failed to submit its financial results on time.