Kuwait

Kuwait's Global Investment House secured backing from the majority of bank creditors for its restructuring on Monday, a move the debt-laden firm hopes will be a significant step in ending its financial troubles, Reuters reported. The Kuwaiti investment company and asset manager, undergoing its second debt restructuring in three years, may be able to implement the plan as soon as next week if it wins the approval of a High Court of Justice in London scheduled for Dec. 3.

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.

Shareholders in Kuwait's Global Investment House approved on Sunday a final plan to create new special purpose vehicles that will carry the company's debt as part of the $1.7 billion debt restructuring plan, Reuters reported. Global, which is undergoing its second debt restructuring in three years, will create at least two SPVs, one to hold company assets along with a debt of $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, Managing Director Maha al-Ghunaim told a news conference.

Distressed Kuwaiti investment firms might increasingly resort to debt-for-equity swaps and principal reductions to cut their debt load as they continue to struggle with high levels of leverage and depressed real estate and stock valuations, Reuters reported on an International Financing Review story. Hit hard by the financial crisis of 2008, most of Kuwait's investment firms have traditionally resorted to maturity extensions to avoid default.

Global Investment House, the Kuwaiti investment firm undergoing its second debt restructuring in three years, will seek shareholders approval for a debt-for-equity swap which if approved will see creditors own 70 percent of the company, Reuters reported. The proposed plan, which will see the remaining debt met by assets transferred to the creditors, would be a rare example of debt-for-equity being used in a Gulf Arab restructuring.

Kuwait's Global Investment House is expected to receive approval on Thursday to delay the repayment of bonds worth 95 million dinars ($338.6 million) to November from June, two sources familiar with the matter said, Reuters reported. "Bondholders have verbally agreed to the extension. The Thursday meeting will make it official," one banker, who asked not to be named, said.

Kuwait's Global Investment House said on Tuesday that it would ask creditors to further extend a deadline for repaying debt to November from June as part of a restructuring proposal it plans to submit soon, Reuters reported. The company, which is undergoing its second debt restructuring in three years, did not specify an amount. "The main point is that Global is progressing in its negotiations with lenders," a statement filed on the Dubai bourse said. It has asked for the repayment deadline to be pushed to Nov. 10 instead of June 10, it said.

Kuwaiti retailer Alshaya has bought 60 La Senza UK stores, rescuing about 1,100 jobs, from the administrators of the stricken lingerie chain, Reuters reported. Alshaya bought the shops and UK brand in a so-called pre-pack deal after KPMG was appointed administrator to the company on Monday. Another 84 stores and 18 concessions had closed, the administrators said, resulting in about 1,300 job losses. The company was owned by Lion Capital, which had announced 81 of the closures on December 30.

State-owned Kuwait Airways has delayed plans to privatize the airline and will now push ahead with a restructuring of the ailing carrier, a committee formed for the privatization process said, Reuters reported. The national carrier, which was established in 1954, has been struggling to cut losses and increase revenues amid rising competition from other regional carriers like Dubai's Emirates and Abu Dhabi's Eithad Airways.

Two years after the Dubai debt crisis erupted, contributing to a wave of loan restructurings across the Gulf, those restructurings may be entering a more difficult phase as banks become reluctant to extend maturities further, the Kuwait Times reported. Government-related and private companies in the region have so far avoided defaults by agreeing with creditors to push out maturities-a process labelled "extend and pretend" by some cynical bankers. This method has helped banks avoid billions of dollars in writedowns and companies to avoid the shame of defaulting.