x Abu Dhabi, UAEMonday 24 July 2017

Creditors agree to GIH debt restructuring

Creditors of Global Investment House (GIH) have agreed to restructure about US$1.73 billion debt over three years.

Creditors of Global Investment House (GIH) have agreed to restructure about US$1.73 billion (Dh6.4bn) debt over three years after its default on a loan a year ago, the banks says. Kuwait's largest investment bank said it had entered into new facilities with each of its 53 lenders. "The rescheduling will allow us to focus on our core business of asset management, brokerage and investment banking," said Mustafa Zantout, the head of marketing communications for GIH.

The bank's current debt will be repackaged into multi-currency, conventional, Islamic and bilateral facilities, based largely on the terms of its existing syndicated loans. "The facilities will be amortised over three years primarily using the proceeds from the sell-down of assets in the Global Marco Fund," GIH said. "The assets in these businesses will be disposed of in an orderly manner, taking into account market conditions, and with a view to maximising value."

GIH asked its banks for a rescheduling of its payment terms after it announced in January it had defaulted on most of its debt as a result of the global financial crisis. If it does not repay $700 million of debt within two years, GIH creditors can convert the amount they are still owed into shares. GIH is the second Kuwaiti investment firm this week to agree to a deal with creditors. Investment Dar said on Monday it had reached an agreement on a debt-restructuring plan.

In response to the financial problems at investment firms, the Kuwait government launched a rescue plan worth 1.5bn dinars (Dh19.26bn) this year. The investment bank posted a loss of 104.2m dinars for the first nine months of this year after its investments and property portfolios were affected. GIH shares rose 4.4 per cent yesterday as the Kuwaiti stock index gained 0.2 per cent. @Email:tarnold@thenational.ae