Kuwait's Global optimistic about 2010

Shareholders approve restructuring deal after creditors agree to reschedule firm's debt.
Kuwait's Global optimistic about 2010
By Eman Goma
Tue 12 Jan 2010 07:52 PM

Kuwait's Global Investment House said it was optimistic about growth this year and signalled the worst is over, after shareholders gave the nod to its $1.7 billion debt plan on Tuesday.

Global, which defaulted on most of its debt in December 2008, said it sees a "huge improvement" in its full year 2009 earnings despite booking higher provisions in the fourth quarter, its managing director said.

Global is one of the largest investment companies in the Gulf Arab state and was hit hard by the global financial crisis and its aftermath.

Maha al Ghunaim said: "In the last quarter, we had to take more provisioning and impairment (charges) in relation to some of our investments considering what has happened in Dubai and the effect it had on the region."

Global has no direct exposure to Dubai's debt troubles, she added.

Dubai shocked world markets on Nov 25 when it requested a standstill on $26 billion worth of debt owed by state owned conglomerate Dubai World, a flagship of the emirate.

Speaking to reporters at a shareholder's meeting, she said:"The losses (in 2009) have actually decreased substantially, so it looks like we are bottoming out."

Global saw a full year loss in 2008 of $899.7 million mainly due to impairment charges for investments and loans, compared to a profit of 91.4 million dinars in 2007.

Earlier on Tuesday, Global's shareholders approved a restructuring deal to transfer its main investments and real estate assets to two new units after the firm reached a deal with creditors last month to reschedule $1.7 billion in debt.

Ghunaim also said that the firm is in talks on several asset sale transactions in Kuwait, Egypt and Jordan, but not as part of its debt settlement plan. The firm wants to focus on its core business and deleveraging the company, she said.

Global said this week that it will use the proceeds from selling its stake in a Chinese firm as part of its debt settlement plan.

Mustafa Behbehani, director at Gulf Consulting Co in Kuwait, said: "Global has succeeded to do a settlement and reduce costs... but there must be a follow up every quarter to avoid any surprises."

Global also entered into new three year facilities with each of its 53 lending banks. (Reuters)

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