Dubai: Investment bank Shuaa Capital yesterday said it won't suffer a major financial setback as a result of Kuwait's Gulfinvest International defaulting on a Dh200 million loan.
Gulfinvest said on Sunday it had defaulted on a $54.47 million loan to Abu Dhabi Commercial Bank (ADCB) for which Shuaa was a guarantor. It also said it was in talks with Shuaa to restructure the loan.
"Shuaa had entered into a guarantee in respect of this loan in 2007, and confirms that it will fulfil its obligations as they become due," a spokesman for the group said in an emailed statement.
Shares in Shuaa dipped 3.3 per cent at one point before recouping losses to trade flat on the Dubai Financial Market yesterday.
The company said it expects "no further material impact or downside risks arising from legacy issues of the firm," and that it doesn't have any similar guarantees on its books.
The Dubai-based investment bank said it already made a provision for the loan guarantee in its 2009 results.
ADCB said it also doesn't expect any material impact related to Gulfinvest.
In Kuwait, analyst Nasser Al Nafisi said Gulfinvest International had more debts.
"Its total debt according to our figures as of September 30 is around 50 million Kuwaiti dinars (Dh629 million) the general manager of Al Joman Centre for Economic Consultancy said. "That is 78 per cent of assets which is a high percentage of course, and 383 per cent of equity."
