KUWAIT: Kuwait’s Global Investment House (GIH) said yesterday that three of its creditors had failed to back a $1.7bn debt restructuring plan and that it was looking at legal options to secure a deal.
Undergoing its second debt restructuring in three years after being buffered by the global financial crisis, Global shareholders approved in September a plan to create new special purpose vehicles that will carry the company’s debt.
However, the debt-for-equity style plan also required the unanimous backing of Global’s lenders to secure an agreement.
“The company obtained the approval for the plan from more than 95 percent of the creditors. There was the exception of three creditors,” a bourse filing on Kuwait’s exchange said.
It said Global, which counts the governments of Kuwait and Dubai as major shareholders, would take all measures at its disposal to secure a deal, including legal proceedings under British law.
Like a number of Kuwaiti investment firms, Global’s business and its investment portfolio were hit hard by the financial crisis, with real estate and stock valuations plummeting and investor confidence drained as a result.
It initially agreed a $1.7 billion restructuring in 2009 but, in September 2011, asked bank creditors to suspend payments under the plan to allow talks for a further reorganisation.
Debt restructurings in Kuwait have to get unanimous backing from creditors unless the negotiations are covered by the country’s Financial Stability Law.
Reuters
