Kuwait's Global says reached deal with Jordan lender

Investment house says Jordanian bank will release its assets seized by a local court.
Kuwait's Global says reached deal with Jordan lender
By Rania El Gamal
Thu 12 Feb 2009 02:11 PM

Kuwait's Global Investment House said on Thursday that it had reached an agreement with Jordan's Housing Bank for Trade and Finance to release assets seized by a local court over a loan dispute.

Global, Kuwait's biggest investment company, said earlier a Jordanian court had halted the operations of its Global Jordan unit and seized its assets after a dispute over a loan from Housing Bank.

"We have reached an agreement with the bank to release the assets in return for some collateral and waiting for the court to revert its ruling," a Global spokesman said.

The dispute arose after Housing Bank said it was no longer willing to accept Global Investment as the guarantor of a loan it had extended to Global Jordan, the spokesman said, without giving details on the size of the loan.

Kuwait's Global said last month it had defaulted on most of its debts as investment firms in the oil producer suffer from a global credit crisis that prompted Kuwait's government to introduce a five billion dollars rescue plan this month.

Shares of Global, which have slumped more than 50 percent this year, tumbled 5.43 percent on Thursday.

Global has said it is seeking one billion dollars in loans to help refinance its debt. It has appointed HSBC and CBK Capital to hold talks with its creditors.

At the end of 2008, Global had total liabilities of $3.1 billion after defaulting on a $200-million loan in mid-December, company Executive Vice-president Bader al-Sumait told Al Arabiya television this week.

The size of Global's portfolio in Jordan in September was about $900 million and included investments in real estate, financial services and industry. Global also opened a brokerage business for Amman's financial markets.

Last week, the Kuwaiti government approved a new stimulus package worth 1.5 billion dinars ($5.12 billion), and is now awaiting Parliament's approval. Parliament is expected to discuss the related bill on March 3.

As part of the plan, Kuwait will guarantee half of all loans local banks provide to investment firms to reschedule debt and 25 percent of those provided by foreign creditors.

Several investment firms have been struggling to refinance debts because banks are reluctant to extend loans. (Getty Images)

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