Global Investment House (GIH), the largest investment bank in Kuwait, has been downgraded to a notch above default by Fitch Ratings after the bank warned it may default on a loan.
The rerating to a 'C' came after GIH told Fitch that it is unable to repay a loan which matured yesterday. The company has a grace period of 72 hours to meet the obligation before defaulting.
"The rating action follows Global's inability to meet an obligation due on 15 December 2008 due to cash flow problems," Fitch said in a statement. "Fitch understands that failure to meet this obligation within 72 hours would result in the company defaulting on this obligation."
"Global is in negotiations with local financial institutions to refinance the above facility. Fitch understands that other obligations will also fall due in December," Fitch said.
The downgrade followed the announcement from GIH earlier this month that it was seeking US$1 billion (Dh3.67bn) from local banks. The global financial crisis has made it difficult for regional banks to roll over their debts, with international sources of funding growing scarce. GIH relies heavily on interbank funding to maintain its operations, which has made the bank especially vulnerable to the credit crunch.
Kuwait's government has taken several steps to support the local financial system, including using its sovereign wealth fund to prop up the local stock market. On Monday the central bank of Kuwait said it plans to buy assets of faltering investment companies in the country in return for financial support, according to the Kuwait-based daily, Al Qabas.
Global Investment House's stock price has declined 59 per cent this year, to 360 kuwaiti dinars. The bank's share price fell 5.26 per cent today, to 0.36 Kuwaiti Dinars.
tpantin@thenational.ae
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The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
Ahmed Raza
UAE cricket captain
Age: 31
Born: Sharjah
Role: Left-arm spinner
One-day internationals: 31 matches, 35 wickets, average 31.4, economy rate 3.95
T20 internationals: 41 matches, 29 wickets, average 30.3, economy rate 6.28
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