Kuwait-based Global Investment House has recommended a zero dividend payout for the third year in a row but has narrowed losses in 2010
Third year without dividend at GIH
Global Investment House (GIH) has managed to reduce its losses as it straightens out its balance sheet - but there is still no dividend in sight for investors.
The financial services company, based in Kuwait, yesterday reported a net loss of 73.2 million dinars for last year, nearly 51 per cent less than the 148.8m dinar loss reported for the previous year. GIH attributed the improvement mostly to profit from its US$5.1 billion asset management business.
But the company' board suspended a dividend payout for the third consecutive year.
GIH reached an agreement with creditors to restructure its debt in late 2009, and after several repayments last year it has paid down $178.3m of the amount owed.
But meeting future payments looks more of a challenge. GIH has already been forced to exit from some of its investments to pay back debt, and asset values are currently low.
It is also entangled in a legal dispute with National Bank of Umm al Qaiwain (NBQ), which it said could hinder its ability to repay debt.
GIH said NBQ was refusing to refund millions of dollars in deposits, despite a court order.
In July, the Dubai courts ordered NBQ to repay GIH $250m towards the refund of a deposit placed with the bank in August 2008. The court also rejected counter-claims made by NBQ, GIH said.
"Regrettably, NBQ continues to deny Global its contractual and legal rights [to refund the deposit] and has appealed against the said judgment," GIH said.
The company has tightened the purse strings on several of its business lines and is focusing on fee-generating business including asset management, investment banking and brokerage.
The company's shares ended the day 2.4 per cent higher at 43 dinars on the Kuwaiti exchange. The shares have shed 22 per cent of their value since the start of the year.