We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Sun 7 Mar 2010 08:08 PM

Font Size

- Aa +

Kuwait's Dar, creditors mull state rescue facilities

Dar not seeking financial support, but a legal framework to implement its plan.

Kuwait's Dar, creditors mull state rescue facilities
STATE RESCUE: Kuwaits Investment Dar said that it was considering the use of a $5.2bn state rescue facility. (Getty Images)

Kuwait's Investment Dar, which owns half of British luxury carmaker Aston Martin, said on Sunday that it was considering along with creditors' to use a $5.2 billion state rescue facility.

The Islamic investment firm said in a statement that the government's aid package would set the legal framework for its restructuring process, amid the dissent of some creditors and investors that have opposed its restructuring plan.

It said: "Dar would not seek financial support in making its repayments, but a legal framework to implement its well supported plan."

The troubles at Kuwaiti investment firms including Dar led the government of the world's fourth-largest oil exporter to approve a rescue package last year, worth $5.20 billion.

The rescue package, called the financial stability law, guarantees 50 percent of fresh loans banks provide to local firms as part of a plan to soften the impact of the global credit crunch.

Dar said: "The financial stability law ... will allow the agreed plan to be implemented, with a stay of legal claims from dissenting banks and investors which could frustrate the process."

Credit Suisse is advising Dar on the restructuring plan.

In December, the firm said it had reached an agreement with its creditors and investors on a five year debt restructuring plan.

It had said that over 80 percent of its creditors and investors had accepted its proposed plan.

Dar defaulted on a $100 million Islamic debt issue last year - the first of its kind on a major, public Islamic instrument in the region - and has said it may sell some assets to meet its obligations.

In September, Kuwait's central bank appointed a temporary supervisor to monitor debt restructuring and the compilation of financial results at Dar.

Trading in Dar shares has been suspended since April 1, after the firm failed to submit its 2008 financial records on time.

Dar had said it was seeking to borrow up to $1 billion to refinance its debt. (Reuters)

Arabian Business: why we're going behind a paywall

For all the latest market 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.