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GIH seeks $1b in domestic loans to reschedule debt
Global Investment House, Kuwait's biggest investment bank, said yesterday it is in talks with several local banks to secure loans worth $1 billion (Dh3.67 billion), and confirmed it had sold a stake in a Bahraini lender at a loss.
- Reuters
- Published: 23:35 December 4, 2008
Kuwait City: Global Investment House, Kuwait's biggest investment bank, said yesterday it is in talks with several local banks to secure loans worth $1 billion (Dh3.67 billion), and confirmed it had sold a stake in a Bahraini lender at a loss.
Major Islamic investment firm Investment Dar, which controls British luxury car maker Aston Martin, meanwhile said it was seeking loans after a newspaper said it was being pressured by banks to sell some assets.
Shares in Global fell 1.3 per cent, while Dar's stock dived 5.5 per cent yesterday, underperforming the main benchmark index which closed 0.5 per cent up.
Global's Executive Vice-President Omar Al Quqa told Reuters that Kuwait's biggest investment bank is expected to reach a deal, after December 13, to replace short-and medium-term foreign loans with local loans.
"We are in continuous talks... We are rescheduling foreign debt with local debt. Things are moving in the right direction," Al Quqa said, declining further comment.
The talks come after the government reached a deal with local lenders to provide more loans to investment firms which have been hit by the global financial crisis. Kuwait is also setting up a fund to buy up distressed assets of such firms to help them cope with the crisis.
Commercial Bank of Kuwait Chairman Abdul Majeed Al Shatti declined to comment on a report by daily Al Watan that it was leading the talks and had won approval by other banks to grant such a loan.
The daily Al Qabas said in an unsourced report that the loan deal was delayed as some lenders were reluctant to participate in it and had demanded state guarantees.
Global, which is mainly active in the Middle East, has a licence as an investment firm but offers typical investment bank services such as underwriting issues or managing funds. It buys into firms and then sells them to investment funds.
Stake sale
Global also said it sold its 14.7 per cent stake in Bahraini lender Bank of Bahrain & Kuwait (BBK) for 43.6 million dinars, booking a loss of 18 million dinars ($65.36 million).
Global declined to give a reason for the quick sale to Al Tijari Investment, saying only that the company wanted to focus more on its asset management and investment banking and scale back investments.
"The sale of the stake in BBK is on par with Global's strategy to reduce the size of its principal investment book by at least a third from a billion dinars in a year's time frame," Global said.
Global had increased its stake in BBK to 17.82 per cent in June, and previously even sought a 40-per cent stake.
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