x Abu Dhabi, UAEThursday 27 July 2017

Leeway on debt for Kuwaiti firm

Global Investment House opens the door for a rescheduling of its debts in the next six months as turmoil grips world markets and liquidity vanishes.

Global Investment House has won creditors' approval to begin debt rescheduling negotiations in the next six months if needed.

Lenders "approved an amendment to the facilities agreement to waive until 31 March 2012 a condition that might have restricted any negotiations for the rescheduling or restructuring of the group's indebtedness", the Kuwaiti company said.

The bank's US$1.71bn (Dh6.29bn) loan facility, due for repayment next year, had already been restructured in December 2009 after the global financial downturn, though analysts said many in the market had expected another change to the terms of the deal for some time.

The agreement among creditors "opens the door for any negotiations which we might need from now until 31 March 2012", said Moustafa Zantout, a spokesman for Global.

Several Kuwaiti investment firms have sought to extend or renegotiate debt repayments after the financial downturn and a regional property slowdown.

Noor Financial Investment, another Kuwaiti investment company, this week asked banks for a six-year extension on loans.

This latest announcement from Global represents a precautionary measure following convulsions on world markets that were sapping liquidity and suppressing asset prices, Mr Zantout added.

Further tweaks to Global's loan agreement had appeared inevitable for some time and would reassure the market that the company retained the support of its creditors, said Ahmad Alanani, a senior executive officer with Exotix in Dubai.

"Today's announcement demonstrates that there's a certain amount of good faith that Global Investment House has been able to build among its banks," he said.

In addition to facing the turmoil hitting world markets, Global is embroiled in a legal dispute with the National Bank of Umm Al Qaiwain. It centres on a deposit of $250 million paid by Global at the onset of the global financial downturn for a capital-raising that never materialised.

 

ghunter@thenational.ae