Kuwait's Gulfinvest asked to liquidate assets

25/02/2011 00:00 AST

Gulfinvest International, dropped from the list of investment firms in Kuwait, was asked by the Ministry of Trade and Industry to liquidate its assets, a local paper said on Thursday citing sources. The Arabic-language daily reported that the ministry asked the company to hold an ordinary annual general meeting for 2009, and an extraordinary meeting for 2010 within the next two weeks, citing sources that it did not identify.

"The shareholders will be asked to take the liquidation procedures, based on the Ministry of Finance's decision in this regard," said the sources.

Earlier this month, the company said it received initial approval for its debts restructuring plan. The Ministry of Finance will take its decision to court if shareholders do not sign on to the plan, the sources added.

Gulfinvest said in response that it will hold the annual general meetings the ministry asked for, yet will appeal to court in order to revoke the ministry's decision. Last year, Gulfinvest defaulted on a 200 million UAE dirham (54.47 million US dollar) loan from Abu Dhabi Commercial Bank (ADCB) for which investment bank Shuaa Capital was a guarantor. Kuwaiti investment houses were hard hit by the financial crisis, which prompted the government of the world's fourth-largest oil exporter to approve a five billion dollar rescue package in 2009. Trading in Gulfinvest's shares on the Kuwaiti bourse were halted since April 2010, after the firm submitted its financial results.

On another note, the Kuwait Stock Exchange (KSE) posted losses amounting to some 400 million Kuwaiti dinars during the last week of this month with all market segments sliding, particularly the investment sector which dropped by 3.3 percent, a specialized economic report said here Thursday. A report by Wuduh Financial and Economic Consulting Company said that anxiety is reigning over investors due to the escalation of tensions in some countries of the Middle East region, adding that though indices rose from the lowest bottom which they hit during the week, trading remained so weakened as rebounds of share prices, "were technical in general", and came as a natural result of the past retreats.

It added that KSE ended trading of the last week of February with price index closing on a drop by 7.1 percent compared to the previous week, while the weighted index closed the same week on a decline by 7.9 percent compared to the previous week as well. Kuwaiti financial analysts unanimously agreed today that there are external and domestic pressures which are reigning supreme over the KSE trading until this weekend. These analysts added in separate interviews with Kuwait News Agency (KUNA) that the haphazard movements of small traders supremely affected the KSE performance on worries that KSE may see retreats following the approval of Zain deal or any other political, economic events in the region. Financial analyst Maitham Al-Shakhs said that though KSE closed on a rally, this did not help trading make up for the losses sustained over the past days as the trading value saw its all-time low since 2001.

Agencies