The Investment Dar Company’s restructuring plan will kick off by the end of this month paving the way for the company to pay approximately KD82 million.
This amount will be paid out in the first year which will go to individual investors and small non financial institutions. In the second, third, fourth and fifth years there will be fixed payments to the remainder of the banks and investors, followed by a final payment before 30 June 2017 which will make up the balance owed to this group plus an amount equating to an annual profit over the 8.5 year period.
Further to the judgment of Kuwait’s Special Circuit Court of Appeal (“The Court”) under the Financial Stability Law (“FSL”) relating to The Investment Dar K.S.C.C.’s application for entry under the FSL and a meeting today with its banks and investors in Dubai, the Company is pleased to provide the following update on the restructuring of its financial obligations.
On 2 June 2011, TID was admitted under the FSL following the approval of the restructuring plan which was submitted by the Company to the Court on 5 May 2011. The FSL provides the necessary legal framework under which TID can implement the court-approved restructuring plan (“the Plan”) in which full repayment of all of its banks and investors is incorporated.
For the duration of the Plan, the Company has undertaken to remain subject to a variety of commercial restrictions detailed in the Court judgment which ensure that at all times TID’s business activity is focused on maximizing the value of its assets, meeting the repayment schedule given in the Plan and maintaining value for TID’s shareholders in the longer term. The commercial restrictions include a freeze on dividends to shareholders, on new TID investments and on taking on any new indebtedness. The Plan also undertakes to separate the roles of the Chairman and CEO within the Company.
In addition to these undertakings, the Company presented to its banks and investors at today’s Dubai meeting several additional voluntary initiatives outside the Court judgment to ensure compliance with international best practice, maximizing visibility and transparency for its banks and investors. These include having a new coordinating committee of the banks and investors to liaise with the Company at regular face-to-face meetings, establishing regular reporting processes, as well as appointing a qualified individual to be the first contact point for all TID banks and investors to disseminate information. Work is also underway to investigate how banks and investors may trade their exposure. The challenging burden of responsibility to implement the Plan is the responsibility of TID’s Board and Executive Management; however, in accordance with the articles of the FSL a Central Bank Monitor will review progress, with full access to personnel and financial information.
“This has been a challenging process for everybody involved and we hope to draw a line under the past and move forward and back into business for the good of all stakeholders as well as Kuwait itself,” Adnan Al Musallam, Chairman of Investment Dar, said.
“I would like to take this opportunity to thank TID’s banks and investors for their patience and support as well as to extend my sincere gratitude to the Kuwaiti Judiciary and regulatory authorities. The Company, its advisors and both Coordinating Committees worked tirelessly over the last two years to find a solution to what has been a complex process in which we have had to overcome a great many obstacles. We are now in a position to begin the implementation of a restructuring plan under which all TID’s banks and investors will receive full repayment and which provides the most best possible outcome for all of TID’s stakeholders. We look forward to continuing to work closely with all relevant parties to ensure the effective and efficient implementation of the agreed plan. TID maintains a strong asset base from which to service its obligations and has solid future commercial prospects.”
The Company met to discuss the detail of the Court’s judgment and the restructuring plan with banks and investors in Kuwait on Wednesday.