Shareholders of Kuwait's Global Investment House have approved the write-off of KD94.7 million ($327.9 million) of the company's losses through a capital reduction, the investment firm said in a statement on Tuesday.
The move, agreed at an extraordinary general meeting, aims to draw a line under years of financial troubles for the firm caused by debt taken on during the boom years of the mid-2000s which became unsustainable during the global economic crisis.
Under the plan, Global will cut its paid-up capital to 79.9 million dinars from KD174.6 million, it said in a bourse filing in London. This will allow the firm to use an accountancy technique to nullify its entire amount of accumulated losses up to December 31, 2013.
Global was hard hit by the global financial crisis, undergoing two debt restructurings. In an interview with Reuters last month, Global's chief executive Maha al-Ghoneim said the company was now "debt free" following its second restructuring, completed last year.
The reduction in Global's paid-up capital will be applied pro-rata to all shareholders but will have no impact on the total balance of equity attributable to the equity holders of the parent company, it said.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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