Global Investment House KSCC’s second deal with creditors to restructure $1.7 billion (Dh6.24 billion) of debt may help Kuwait’s struggling investment companies to recover after the nation’s credit crisis slowed lending.
Shareholders of Kuwait City-based Global agreed this month to issue 122 million Kuwaiti dinars (Dh 1.59 billion or $433 million) of shares to be held by a special purpose vehicle, which would manage $435 million of the company’s debt. Global would transfer the remaining liabilities to a second SPV, enabling it to focus on reviving asset management, brokerage and investment banking businesses after reporting consistent losses since the end of 2008.
“We view the restructuring of Global’s debt as generally positive to the extent that it provides for a resolution process,” Stathis Kyriakides, a Cyprus-based analyst at Moody’s Investors Service, said in an e-mailed response to questions on September 7. For banks, “it appears that a clearer path toward recovering a portion of their exposure is gradually being developed.”
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