Kuwait Finance House (KFH) signed an agreement with Gulf Investment House (GIH) to restructure its debts that reach KD49.5m, which includes converting the current debts from short term to medium term for a period of five years.
The agreement was signed in collaboration with Boubyan Bank and Burgan Bank, and was supervised by Liquidity Management House (LMH).
KFH's AGM for Finance Sector Mr Emad Al-Thaqeb stated that the agreement comes as part of a program to support local investment companies, which is supported by the Central Bank of Kuwait. The presence of KFH as a main shareholder (30%), supporting the restructuring plan and possessing good assets whilst also encouraging other local banks to approve the agreement. The execution of this agreement will allow the company to focus on managing existing assets and projects.
GIH faced the challenges imposed by the financial crisis that affected all economic sectors and financial institutions around the world. KFH is confident GIH will be able to continue to operate in line with its vision over the upcoming period as a result of the debt re-structuring.
Mr Al-Thaqeb asserted that KFH remains committed to the national economy and other business entities with strong financial coverage, in order to assist them in regaining their role in the local economy, which will allow Kuwait to reach its deserved status on the regional and global economic map. KFH will continue to support local companies in line with the supervisory regulations.
Meanwhile, GIH's CEO Mr Bader Al-Ali thanked all those who took part in the success of the restructuring agreement, and explained that the company's balanced policy and conservative methodology lessened the impact of the financial crisis on the company's financial status.
Mr Bader Al-Ali confirmed that GIH signed a memorandum of understanding with the debtors to restructure its debts; thus allowing the company to focus on future investment plans. GIH plans to continue to offer investment products, increase revenues from management fees, and focus on operational and service investments. GIH may exit further investments to provide liquidity to enter new investments and to meet the demands of the restructuring; in addition to distributing risks through geographical expansion.
LMH's Deputy Chairman and CEO Mr Emad Al-Menaie explained that the success of the deal is KFH's acceptance to lead the debts settlement through financially supporting the company. This comes as part of KFH's efforts to support Kuwaiti investment companies.
It is worth noting that KFH and other Kuwaiti banks had signed an agreement earlier this year to restructure the debts of Aref Investment Group that reached KD290m. KFH has also spearheaded the restructuring of debts plan of Al-Oula Investment Company that reached KD92m by turning them into sukuk.
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