By Andy Sambidge
Investment company enters into formal agreements with all its bank creditors
Kuwait's Global Investment House said on Wednesday it has entered into formal restructuring agreements with all its bank creditors.
The deals pave the way for the company's $1.7bn restructuring proposal to be implemented, it said in a statement.
The Kuwaiti investment company and asset manager, undergoing its second debt restructuring in three years, added that as part of the deal, Global's core fee businesses will be separated from its non-core principal investments.
Under the restructuring, Global plans to create two SPVs one of which will
hold company assets, along with debt, worth $1.3bn.
The other vehicle will take part in a capital increase for the parent
company, in which Global will offer KD122.2m ($433m) of new
shares to creditors, leaving them owning 70 percent of the investment firm.
Maha Al-Ghunaim, chairperson and managing director of Global, said: "Today represents a significant milestone for Global and is the culmination of intensive and constructive discussions with our financiers throughout this process.
"We are delighted to have achieved this successful outcome and by the overwhelming support financiers have shown Global throughout this process.
"We endeavour to maximise recovery for financiers and protect and safeguard the interests of all stakeholders in these unprecedented market conditions," she added.
Arul Kandasamy, chair of the coordinating committee of financiers, added: "Global's senior management team has displayed proactivity, professionalism and transparency throughout the process, which have allowed us to structure a unique solution that can serve as a template for other debt restructurings in the region."
"We affirm our continued support of the restructuring transaction and wish the management and board every success in driving forward the market leading core business lines of the company."
Global was one of several Kuwaiti investment firms hit hard by the global financial crisis, having used short-term debt to invest heavily in local real estate and stocks whose values subsequently slumped.