Remember TID? « Alpha Dinar

Two weeks ago news circulated that banks were reducing their exposure to Kuwait’s Investment Dar (TID) by selling syndicated loans at distressed levels, at 33 cents on the dollar of a $25 million piece of TID’s loan. Following an earlier trade that was picked up by some traders in the low 20s around three months ago.

While both trades are only a small piece of TID’s $3.55 billion in liabilities, it still buys way for activist investors into the creditor negotiations. Do debt traders see real value in Investment Dar? Probably yes.

Today, TID and the newly appointment coordinating committee of its creditors agreed to a revised plan to restructure the company’s $3.55 billion debt. Under the plan TID will pay KD 405 million of debt in three to four years with an 11 percent profit rate a year, according to the statement. Of that 11 percent, five percent will be paid in cash and the rest ‘‘payment in kind.’’ The remaining KD 600 million will be paid between years four to eight, the statement said.

The plan converts part of the creditors’ debt claims on the company into equity in Investment Dar, the statement said. Investment Dar ‘‘shareholders can reclaim part of this equity if debt repayments are honored in full,” it said. Under the plan, 10 percent of the company’s shares “will be passed to the banks and investors as part of the restructuring package.