The Investment Dar (TID), a Kuwaiti company that owns half of Aston Martin, has agreed with its core group of creditors to a new plan to restructure around $3.6 billion (Dh13.22bn) of debt.
The company was one of the first in the region to default on debt in the aftermath of the global financial crisis, missing a payment on a $100 million Islamic bond in May of 2009.
Its restructuring, however, has been held up by protracted negotiations and legal obstacles. An initial creditors' co-ordinating committee representing banks to which TID owes money resigned last November.
With the deal agreed to today between TID's management and a new co-ordinating committee, both parties are hoping to put the legal turmoil and drawn-out talks of the past two years behind them. The new deal "contains revised facilities under which full repayment with profit will take place over a six-year to eight-year period," TID said in a statement.
The terms call for TID to repay 405m dinars ($1.45bn) of debt in three to four years at an 11 per cent profit rate, the Shariah-compliant equivalent of interest, its statement said. TID is to repay an additional 600m dinars ($2.14bn) of debt in four to eight years.
Some of the debt is to be settled with a debt-for-equity swap, meaning the company is asking banks to convert a portion of its borrowings into ownership stakes in TID. If TID is able to pay off its debts as envisaged in the restructuring, however, shareholders could reclaim ownership stakes taken by banks, according to the company's statement. Shareholders are also planning to inject "up to 20m dinars" in fresh equity in the 12 months after the plan's adoption.
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TID is listed on the Kuwait Stock Exchange, but its shares have not traded since restructuring talks began.
The plan still needs the approval of TID's board of directors before it is presented to the company's wider group of creditors for a final sign-off. The Central Bank of Kuwait must also confirm the deal, a source close to the company said.