Investment Dar in restructure talks

The Kuwaiti half-owner of Aston Martin to thrash out details of new arrangements in Dubai for a five-year repayment schedule

The new Aston Martin Cygnet car is displayed on the exhibition stand of Aston Martin during the first media day of the 80th Geneva Car Show at the Palexpo in Geneva March 2, 2010.     REUTERS/Denis Balibouse (SWITZERLAND - Tags: TRANSPORT BUSINESS) *** Local Caption ***  GVA311_AUTOSHOW-_0302_11.JPG *** Local Caption ***  GVA311_AUTOSHOW-_0302_11.JPG
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The Investment Dar (TID) will meet its main creditors in Dubai today to hammer out details of a plan to restructure its US$3.5 billion (Dh12.85bn) of debts. The proposals, which have been the subject of negotiations since the Kuwaiti company defaulted on a $100 million sukuk last year, are intended to put its obligations on a five-year repayment schedule.

So far the company, which owns half of the British car maker Aston Martin, has received the support of 80 per cent of creditors. "We are making good progress with our restructuring plan, driven by the continuing positive partnership between ourselves and the co-ordinating committee (Co-com)," said Adnan al Musallam, the chairman and chief executive of TID. "With all the documentation coming together well we will be in a position to continue with the implementation of the same restructuring plan, which has received the support of over 80 per cent of the banks and investors.

"Our plans envisage the full repayment of all outstanding obligations as well as the enhancement of our portfolio value over the long term to the benefit of our investors, banks and shareholders." Most of the creditors, 40 per cent of whom are Kuwaiti and 60 per cent international, have agreed to the proposals, but a group amounting to about 20 per cent of debts is holding out. These are thought to include Commercial Bank of Kuwait and Blom Bank of Lebanon.

TID is in the process of using Kuwait's "financial stability law" to force dissident creditors to accept the proposals. The Kuwaiti central bank, advised by the international accounting firm Ernst and Young, is also reviewing the restructuring process. Credit Suisse is advising the Co-com, while TID has retained Morgan Stanley. The restructuring has also been complicated by the fact that the Kuwaiti central bank has yet to approve the company's 2008 and 2009 financial statements due to disagreements over the level of impaired investment provisions for 2008, in particular.

The proposals involve extending debt maturities and selling assets. In addition to Aston Martin, bought for $653m in 2007, TID has interests in international property, financial services and transport. The company's problems have been the most high-profile in Kuwait's troubled financial services industry, which has suffered billions of dollars of losses and forced the Kuwait government to intervene after the sector was blasted by the global financial crisis.

"All commercial aspects of the documentation required for the implementation of the restructuring plan have now been agreed with the co-ordinating committee, the representative group of Investment Dar's banks and investors, and its advisers," TID said yesterday. "The documentation is in the process of being translated into Arabic for review by the sharia boards of both Investment Dar and Morgan Stanley, the co-ordinating committee's financial adviser, as well as other reputable sharia boards of its bank group.

"Once finalised, it is anticipated that these documents will be lodged with the Kuwaiti courts to enable the rapid execution of the restructuring plan upon its pending approval in the coming few months. "? the company is also in the process of finalising its five-year business plan and budgets under the terms of the restructuring plan, which envisages the full repayment of all outstanding obligations."