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Wed 16 Dec 2009 07:50 AM

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Kuwait Finance House pulls out of Malaysian tower deal

No reasons given for the pullout, but a statement is set to be issued later.

The Malaysian unit of Kuwait Finance House has pulled out of a 920 million ringgit ($270m) deal to buy part of an office tower from a local property developer.

Malaysia's YNH Property Bhd told the stock exchange late on Tuesday that Kuwait Finance House Malaysia (KFHM) had informed it that it would not proceed with the purchase.

YNH Property also said it may seek legal damages from the Islamic bank.

No reasons were given for the pullout. A KFHM spokesperson said a statement will be issued later in the day.

Valued at about 1.8 billion ringgit, the YNH tower was to be constructed in the Malaysian capital. YNH Property signed the deal with KFHB last year in January.

Malaysian rating agency RAM Ratings last month revised its outlook on the firm to negative from stable, citing a challenging operating environment in Kuwait that has pressured the credit fundamentals of its parent.

Kuwait Finance House has said that it is not exposed to the debt problems of Dubai state-ownd conglomerate Dubai World or its property unit Nakheel, which have undermined investor confidence and thrown a spotlight on weak commercial real estate markets worldwide. (Reuters)

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