Kuwaiti investment firm Aayan Leasing and Investment Co will get fresh loans from three local banks to help refinance debt, Commercial Bank of Kuwait (CBK) said on Monday.
An initial agreement by the CBK, Kuwait Finance House and Bank of Kuwait and Middle East will offer Aayan "new facilities and restructure some outstanding facilities," CBK said in a statement. It did not elaborate.
Al-Tijari Investment Co, a unit of CBK, will hold talks with other creditors on behalf of the banks to take part in the finance agreement and an adviser will be appointed to evaluate Aayan's financial position and cash flows, the statement added.
It did not say how much loans Aayan would get, and CBK officials could not be immediately reached for comment.
Daily al-Rai said on Sunday that Aayan was to get syndicated loans from banks worth about 150 million dinars ($520 million).
Central bank governor Sheikh Salem Abdul-Aziz al-Sabah said in November banks would provide financing to investment firms facing liquidity problems due to the global financial crisis.
Under the deal, banks would help investment firms, while the sovereign wealth fund Kuwait Investment Authority would provide long-term deposits to banks, the head of Kuwait's banking association has said.
Four investment firms have already received about 46 million dinars in loans under the deal and banks are currently reviewing requests by 10 firms to get 492 million dinars in loans, according to a government report obtained by Reuters.
Investment firms, which make up roughly half of Kuwait's listed companies, have been urging the government and banks to provide them with fresh loans to bridge short-term funding gaps.
Pressure is mounting on the government to do more and help troubled financial firms after Kuwait's largest investment bank, Global Investment House said earlier this month that it had defaulted on most of its debt and Investment Dar said it needed loans of up to $1 billion. (Reuters)For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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