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Thu 9 Jul 2009 04:10 PM

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Kuwait's Global to double its capital 'in months'

Part of additional capital will be used to help meet bank's $3bn debt obligations.

Kuwait's Global to double its capital 'in months'
CAPITAL PLAN: Global Investment House aims to double its capital to help meet debt obligations.

Plans by Global Investment House to more than double its capital to 281m Kuwaiti dinars ($979m) would be carried out over the coming months, a spokesman for Kuwait’s largest investment bank said on Thursday.

Part of the additional 150m Kuwaiti dinars to be raised by Global would be used to contribute towards meeting the bank’s $3bn debt obligations, the spokesman added, without specifying the amount.

Global was waiting to finalise a rescheduling of its loans after submitting updated proposals to its creditors in June through its international financial advisor HSBC, he told Arabian Business.

The bank defaulted on most of its debt in January due to the global credit crunch.

“Despite the default, Global, reflecting the relative strength of its position, has continued to pay all interest on outstanding debt obligations, which many similar companies in the region have not done,” the spokesman added in a statement.

Bonds holders also agreed last month to extend by six months the maturity of 20m Kuwaiti dinars worth of its bonds, due in June.

Shareholders agreed in June to a proposal to increase the company’s capital to 281m Kuwaiti dinars, under the bank’s plans to reschedule its debt and revamp its business.

This authority would give the bank’s board flexibility to take advantage of market conditions and complete a capital raising to de-leverage the company at the appropriate time, the spokesman added.

He said the bank would continue to focus on its core business of asset management, investment banking and brokerage.

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