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UPDATE 1-Kuwait investment firm seeks end to debt deal delay
November 13, 2012 / 3:36 PM / 5 years ago

UPDATE 1-Kuwait investment firm seeks end to debt deal delay

* Q3 net loss narrows-Reuters calculations

* 9-mnth net loss 35.5 mln dinars-statement

* Restructuring costs drag on earnings

* Three creditors withholding debt deal assent (Adds detail, background)

DUBAI, Nov 13 (Reuters) - Kuwait’s Global Investment House , buffeted by a real estate slump and market turbulence, posted further losses on Tuesday and said it had yet to persuade a handful of creditors to back a second debt restructuring in three years.

The company, whose major shareholders include the governments of Kuwait and Dubai, lost 14.9 million dinars ($52.8 million) in the three months to Sept. 30 versus a 15.5 million dinars loss for the same period of 2011, Reuters calculated based on a statement to the London Stock Exchange.

Its loss in the first nine months of 2011 stood at 35.5 million dinars, the statement said. It did not provide a comparative figure.

Costs related to debt restructuring dragged on earnings while other operating expenses rose 42 percent in the nine months to Sept. 30 this year over the corresponding period last year.

“The other operating expenses increased...mainly due to costs associated with a project to seek a long-term solution to the company’s capital structure,” the statement said, adding without this expense, the figure would have been 26 percent lower than last year.

Global said three of its creditors failed to back a $1.7 billion debt restructuring plan and it was looking at legal options to secure a deal.

“The company obtained the approval for the plan from more than 95 percent of the creditors. There was the exception of three creditors,” a bourse filing on Kuwait’s exchange said.

Debt restructurings in Kuwait have to secure unanimous backing from creditors unless the negotiations are covered by the country’s Financial Stability Law, which contains provisions to sidestep dissenters if a vast majority agree to a proposal.

Global shareholders in September approved a debt-for-equity style plan to create new special purpose vehicles that will carry the company’s debt.

This came a year after Global asked bank creditors to suspend payments under its $1.7 billion debt deal agreed in December 2009 to allow for negotiations over a new restructuring.

Global proposes to create at least two SPVs, one to hold company assets along with debt worth $1.3 billion and one which will take part in a capital increase for the parent company and which will carry a debt equivalent of $430 million.

According to the plan, Global would offer 122.2 million dinars ($433 million) of new shares to creditors.

Global is scheduled to meet bondholders, who are due 95 million dinars split between two issues and who also agreed to a repayment delay to allow for debt talks, according to a London Stock Exchange statement filed last week. (Full Story) ($1 = 0.2823 Kuwaiti dinars) (Reporting by David French; Editing by David Cowell)

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