National Industries Group Holding is asking its lenders for extra time to repay US$475 million (Dh1.74 billion) worth of Islamic bonds coming due next month.
The move comes as the investment firm based in Kuwait seeks other forms of fund-raising.
It is seeking consent to extend the maturity of its debt by four years to 2016 and to amend the profit rate from floating to fixed at 4.5 per cent per annum, payable twice a year, it said in a statement to the Regulatory News Service at the London Stock Exchange. The consent request expires on August 9, while a meeting with creditors has been scheduled for August 13, the statement added.
National Industries Group (NIG) has become the latest in a series of investment companies in Kuwait to have sought to restructure debt obligations after the global financial crisis wiped the value off assets and cut access to credit.
The Investment Dar, which owns half of Aston Martin, and Global Investment House, an investment bank, are among the high-profile defaults that shook confidence in Kuwait's economy when they sought to renegotiate the payments and terms for a collective $6.73bn worth of debt in 2009.
"The problem with restructuring debts of investment companies is that it heavily relies on the valuations of their investments - when it's liquid they can sell, when markets are doing well, they can exit," said Fadi Al Said at ING Investment Management (Middle East) in Dubai."But when markets are frozen, liquidity becomes lower and exits become more rare, putting pressure on their cash flow. The only thing these Kuwaiti investment companies can do right now is roll over their debt amid hopes things will improve."
NIG is seeking to raise more than 100m Kuwaiti dinars (Dh1.3bn) through a three-year syndicated Sharia-compliant loan that will be used for the "payment of an early consent fee, any ineligible payments and the initial dissolution amount of 30 per cent", the statement said.
"NIG is committed to redeeming the certificates at the final dissolution amount."
The price on the company's bond fell 1.25 cents last week to 80 cents on the dollar, according to Bloomberg.
National Industries shares, listed on the Kuwait Stock Exchange, fell 1.9 per cent yesterday, bringing total losses for the year to 22.3 per cent. The share price closed at 202 Kuwaiti fils yesterday.
National Industries in May was one of three Kuwaiti firms to be suspended from trading on the Dubai Financial Market exchange for failing to provide financial statements on time.
The company is 10 per cent owned by Kharafi Group through Al Khair National for Stocks and Real Estate Company.
