Global gets full backing for restructuring
Kuwait , December 5, 2012
Kuwait's Global Investment House said on Wednesday it had secured the full backing of its creditors for its $1.7 billion restructuring plan.
The investment company and asset manager, undergoing its second debt restructuring in three years, will separate its core fee business from other parts of the company which would be spun off into special purpose vehicles (SPV) under the plan.
Global was one of several Kuwaiti investment firms hit hard by the global financial crisis, having used short-term debt to invest heavily in local real estate and stocks whose values later slumped.
Under the restructuring, Global plans to create two SPVs one of which will hold company assets, along with debt, worth $1.3 billion.
The other vehicle will take part in a capital increase for the parent company, in which Global will offer 122.2 million dinars ($433 million) of new shares to creditors, leaving them owning 70 percent of the investment firm.
Global's business after the deal will include asset management, investment banking and brokerage operations, it said in a statement.
Shares in the company were suspended from trading in Kuwait last December after the company accumulated losses exceeding 75 percent of its capital. On Sunday shareholders approved the delisting of the stock from the bourse. - Reuters