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Mon 26 Jul 2010 02:01 PM

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Kuwait's IIG defaults on $152.5m sukuk

Company confirms second default this year; firm names KPMG as its advisor for restructuring options.

Kuwait's IIG defaults on $152.5m sukuk
DEBT PLAN: KPMG has been named as IIGs advisor to look at restructuring options. (Getty Images)

Kuwait's International Investment Group (IIG) said it was unable to make a $152.5 million Islamic bond payment, its second default this year, and named KPMG as its advisor to look at restructuring options.

IIG said on Monday its payment on the Islamic bond, or sukuk, had been scheduled for July 12.

The company said KPMG would carry out an independent review of its business and make an assessment of its financial position. IIG said it has also received the central bank's approval for its 2009 financial statements.

"IIG will then be able to assess its positions and restructuring options with assistance from its professional advisors," the company said.

The investment firm said in April it had appointed an international consultant, which it did not name, to review its business after it defaulted on a $3.35 million payment for a $200 million Islamic bond.

Kuwait's investment sector was hit hard by the global financial crisis. The country's Investment Dar was the first company in the region to default on a major sukuk in May 2009. (Reuters)

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How did they invest the money they collected from investors ?

Zulqadar A. Syed 9 years ago

The iceberg is located on Wall St and the Titanic, alas, sailed from the Arabian Gulf (or Iranian Gulf, arguibly?). They invested the money same was as the world invested their kitty into US Equity markets, which were based on fraudulent stock/portfolio ratings and worthless bonds based on subprime mortgages....No one talks about the Fed taking these guys to task....I guess we need bankruptcy laws in the GCC so that US/Western investors/banks get a taste of their own medicine...Gulf states' investments worth trillions goes up in smoke, companies like S&P, Moody's, etc dont get black listed acround the world.. indeed, accountability must apply everywhere. No offense.