Kuwait agrees $5bn rescue plan - local reports

Kuwait Investment Authority will take stakes in companies and pump cash in.
Kuwait agrees $5bn rescue plan - local reports
By Firouz Sedarat
Sat 07 Feb 2009 01:04 PM

A proposed economic recue plan agreed by Kuwait's government is expected to be worth 1.5 billion dinars ($5.09 billion), trade and industry minister Ahmad Baqer has been reported as saying.

The plan would involve the sovereign fund Kuwait Investment Authority taking stakes in companies and pumping cash into them, and will not cover repayment of debt by citizens, reported the Kuwait daily Al Watan.

The cabinet approved the plan to shore up confidence in the economy, including state guarantees for banks and "ways to help troubled firms", amid a global credit crisis hitting the OPEC producer, state news agency KUNA said on Thursday.

Parliament is expected to debate the package on Tuesday, when deputies are scheduled to discuss the impact of the financial crisis on the OPEC member.

The government is facing increasing pressure from MPs to support troubled investment firms, which make up more than half of the country's listed companies and have borrowed heavily to finance expansions during an oil boom in the past few years.

Top investment firm Global Investment House shocked the market last month by saying it had defaulted on most of its debt, while Islamic firm Investment Dar said it is seeking up to $1 billion in loans to refinance its debt. (Reuters)

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