Gulf Finance on a seven-month high

Gulf News

Gulf Finance House EC surged the most in more than seven months after the Bahraini investment bank said it will reduce its liabilities by $290 million (Dh1,067) after exiting its investment in Dubai. The shares gained 10 per cent, its biggest gain since May 21, to $0.33 at 11.34am in Bahrain yesterday. The company took $300 million non-cash charge against its proprietary Dubailand position and has no remaining material exposure to Dubai, it said yesterday in an e-mailed statement.

Global Investment House

Shareholders of Kuwait's Global Investment House (Global.KW), the country's largest investment bank, will hold an ordinary general assembly this month to approve the transfer of the company's investment assets as part of a $1.73 billion debt rescheduling plan, the company said yesterday. Global signed on December 10 an agreement with creditors to reschedule debt over a three-year period and use proceeds from the sale of assets to make payments after defaulting on a loan a year ago. Under the agreement, Global said it would transfer assets from its Principal Investment Business into the Bahrain-based Global Macro Fund and Kuwait-based Real Estate Holdco special investment vehicle. Besides the transfer of assets, Global shareholders will also approve using the assets transferred to the funds as security for creditors at the general assembly, Global said in a statement to the Kuwait bourse yesterday. Global defaulted on most of its debt as the economic downturn left its mark on Kuwait's financial industry, prompting the government to guarantee bank deposits and introduce a financial stability bill among a slew of other measures aimed at shoring up banks and investment companies. Global's current loans will be repackaged into new, multi-currency, conventional, Islamic and bilateral facilities, which will be based on the terms of the bank's existing syndicated facilities under the debt rescheduling agreement.

EFG Hermes

The Egyptian Financial Supervisory Authority (Efsa) has approved the Egyptian Company for Mobile Services's (ECMS or Mobinil) issuance of an EGP 1.5 billion bond fully underwritten by EFG Hermes. ECMS, which operates under the brand name Mobinil, will use the proceeds from the bond to cover planned capital expenditure, investments and network enhancements. The issuance will be made in two tranches: an EGP 1.4 billion private tranche targeting institutional investors, in addition to an EGP 100 million (Dh67 million) public tranche dedicated to retail investors. EFG Hermes Investment Banking is acting as Sole Financial Advisor, Lead Arranger and Sole Underwriter to ECMS on the bond, which stands as the first bond issue in Egypt to have been marketed to financial institutions without being fully underwritten by commercial banks.

Saudi Aramco

Saudi Arabian Oil Co. is leaving a lease for the storage of five million barrels of crude in the Caribbean island of St. Eustatius, and Chinese state-run oil company PetroChina Co. (PTR) is moving in, a person familiar with the matter said on Wednesday. Saudi Aramco began leasing the oil storage terminal — currently owned by San Antonio, Texas-based Nu-Star Energy LP. (NS) — in 1995. The move is considered an indication of how the US market, where fuel demand has plateaued, is losing its lustre for the world's biggest exporter of crude. The news, reported earlier by Reuters, isn't surprising since US oil demand is likely to remain weak with gasoline demand expected to continue to decline, said Fadel Gheit, an analyst at Oppenheimer & Co. in New York. "Oil demand growth has shifted to China and India," he said. It's also a sign of how China is flexing its global muscle. PetroChina, which couldn't be reached immediately for comment, could be interested in gaining a strategic position to store oil produced in Venezuela and other countries in the northern part of South America where China is increasingly doing business, Bob Fryklund, an oil consultant at IHS Inc. in Houston, said. The St. Eustatius terminal, located east of Puerto Rico, has the capacity to store 13 million barrels of crude and crude products.

— Compiled from agencies and staff reports