Kuwait's Global Investment House wants to renegotiate its US$1.7 billion (Dh6.24bn) debt restructuring just two years after hammering out the deal.
The investment company asked its bank creditors on Thursday to defer December payments on the restructured debt to allow for "a more comprehensive restructuring of Global's debt obligations". It also asked to defer increases in interest rates after December and a waiver of "certain covenants applicable to Global" in the restructuring.
The requests raise fresh doubt about the success of Global's hoped for turnaround after its business faltered in the wake of the financial crisis.
It was one of the first companies in the Gulf to seek a delay on debt payments after the crisis struck, and the investment house reported only last month it was on track with the restructuring.
"During [the first half of] 2011 Global made $19.7 million principal repayments, bringing the total repayments since inception under the restructured bank debt to $198m (11.5 per cent of the original principal amount)," Global said, announcing its second-quarter results.
However, the company also raised concerns about its ability to continue making payments under the restructuring, which envisaged Global settling all its pre-crisis debts within a few years. Global's "success in meeting the future principal repayments" of $1.5bn would be dependent on "the ability to make exits from principal investments" and "capital raising" - two avenues of raising money virtually cut off in the absence of a strong regional economic recovery.
The company also cited an ongoing dispute with the National Bank of Umm Al Qaiwain (NBQ) as a potential impediment to payments under the restructuring. Global gave the bank $250m in 2008 as part of a plan to invest in it, but tried to back out when the financial crisis took hold.
NBQ, however, has so far refused to give the money back and the dispute is progressing through Dubai's court system. Global had secured approval earlier this month from its banks to restart negotiations over the restructured debt.
The company is among a number of Kuwaiti finance houses forced to renegotiate debt after the crisis. Kuwait's biggest restructuring was at The Investment Dar, which reached a deal this year to reschedule about $3.7bn of debt.
