A Kuwait investment company has concluded its debt restructuring, ending negotiations that began more than two years ago. Kuwait Financing and Investment Company (KFIC), an investment bank and asset management company, said yesterday it had reached a five-year accord with 22 local and international lenders to restructure 145 million dinars. The process stretches back to early 2008, before the financial crisis began.
"The completion of this process is a milestone achievement," said Saleh Yacoub al Homaizi, the chairman of KFIC. "Coming to an agreement with 22 local and international institutions in a time of crisis was not an easy feat by any of the involved parties." The company, which is listed on the Kuwaiti Stock Exchange and the Dubai Financial Market (DFM), dropped slightly on the Kuwait exchange to close at 0.07 dinars yesterday.
It was not traded on the DFM as the announcement came after the market closed. Considering its fate had been uncertain for more than two years, the company was remarkably bullish yesterday, claiming it now owns "one of the healthiest, cash-rich, highly liquid balance sheets among its peers". Its buoyant mood was no doubt aided by last week's announcement of a first-quarter profit of 1.1m dinars, compared with a loss of 6.1m dinars in the first quarter of last year.The company also reported last month it had been hired as a transaction manager for one of Kuwait's top developers, which planned to acquire the remaining stakes in one of its subsidiaries.
KFIC's deal with lenders includes repayment in four tranches, with the first payment recorded yesterday and the last one due on December 31, 2014. The company said it had a commitment from shareholders to raise additional capital this year. Looking forward, investors may be comforted to know that the company noted it was pursuing "minimal risk opportunities ? we will continue to bolster our balance sheet and expect our performance to gradually pick up with modest bottom-line earnings in line with the prevailing market conditions".