Global mulls more layoffs
Kuwait, October 20, 2010
Kuwait's Global Investment House, one of the country's biggest investment firms, will continue to monitor costs and expects more job cuts this year, although it expects an improvement in results, its managing director said.
Speaking at the Reuters Middle East Investment Summit in Kuwait, Maha al-Ghunaim said she expected the firm's results to be better in the second half of 2010 than they were in the same period a year ago.
'I'm very positive that we will continue to see an appreciation in our revenue line, and if things start to move in the region, you bet that Global will have a place,' she said.
'This crisis has been a blessing in disguise, because today Global is much better, stronger than where it was five years ago, regardless of the profitability,' she added.
'I think I'm optimistic about Global, conservatively optimistic about the industry and very bullish about the region,' she said.
'I think people are assessing all over the world where should the dollar go, and it's Asia and the Middle East.'
Investors 'can look at anywhere between single digit to 12-13 per cent returns in the region, in many different areas, in many different markets within the GCC and Mena and they are going to provide very good opportunities for not only regional investors but also for international investors,' she said.
However, the investment firm will continue to monitor costs and expects more downsizing this year, Ghunaim said. 'We used to be almost 650 (staff members), today we are closer to 420,' she said, adding that she expects more layoffs this year.
Global reached a deal with creditors in December to reschedule $1.7 billion in debt and entered into new three-year facilities with each of its 53 lending banks.
In May the firm's shareholders approved a 76-per cent share capital hike worth around $346 million but Ghunaim said she does not expect the increase to proceed this year and instead the firm will probably start negotiations with investors in the first quarter of next year.
'Although we have the AGM approvals to proceed with the capital increase and we've had some discussions with strategic investors in relation to that, we felt as a board that the timing is very very important at this point in time,' Al-Ghunaim said.
She also said the brokerage business would be a 'very serious priority' for the company in the next three years.
Earlier this year Global advised India's Bharti Airtel on the $9 billion deal it struck to buy most of the African assets of Kuwaiti telecoms firm Zain.
The firm is currently advising on other deals in the services sector in the UAE, Saudi Arabia and Egypt, she added, declining to elaborate.
'We are definitely looking more into the service sector, because that is where I think there is a lot of demand moving forward and also there is a lot of asset disposals and sell mandates, said al-Ghunaim.'-Reuters