KFIC - The debt crisis is over

Reuters - The CEO of Kuwait Finance and Investment (KFIC) Abdulmoghni Al-Moghni that the debt crisis faced by the company since late 2008 is over, after it has been able to restructure its debt, which amounted to KD 158 million in 2010.
The company suffered from the repercussions of the global financial crisis in 2008 and its assets were to cause a sharp decline in exacerbating losses that exceeded 75 percent of the capital which is called the stock market to stop its shares from trading since the beginning of the second quarter of 2011 to now.

In February, the Assembly approved Assembly of the palms on the company to increase capital by 80 million dinars in the framework of a comprehensive restructuring plan.

He said Alabdamoghni told Reuters yesterday that the new shareholders of the creditor banks of the company and bondholders have filed already in the calculation of the capital increase with the Bank of Kuwait (NBK), the subscription manager, $ 50 million represents a contribution to the capital increase, indicating that the volume of coverage was on this side 100 percent .
He added that the top shareholders of the company also contributed to an increase of capital of $ 15 million, noting that this amount constitutes 50 percent of the amount approved by the General Assembly of this slide.
He said it was caused by the restructuring plan to reduce debt to 40 million due to be repaid over five years, subject to extension.
The General Assembly had agreed in February to be 50 million of the capital increase by issuing 500 million shares with a nominal value of 100 fils per share, without premium allocated for new contributors. Current shareholders and approved for waiver of those shares in the IPO in favor of the new shareholders.

It was also agreed at the time that the amount of thirty million dinars, the other by issuing 300 million shares with a nominal value of 100 fils per share, and without the premium allocated to shareholders registered company books the day before the capital call.
Abulmoghni said that the restructuring plan, although it asked for 80 million dinars, but it was built on the basis of only 65 million which is the amount that has been collected already.

He stressed that the crisis was that the company آ«short-term debt higher than their ability to payآ».
The company started since mid-2010, negotiations with creditors of local and foreign banks and bondholders as numbered at the time point of 23.

The chief executive said the company made to creditors in early 2011 a plan آ«to recover and return to normal mode, not only plan scheduleآ». He added, آ«although the company lost its capital, but it did not fall behind one day to pay the debt or debt service, and this is reckoned with and has had a major impact in persuading creditors to enter into restructuringآ».
And managed the company during that period of payment of KD 24 million out of religion to lower the total amount to 120 million dinars in the fourth quarter of 2011 and also paid KD 13 million interest debt.
Alabdamoghni said, which he also encouraged creditors to enter into a restructuring plan is the transformation of the company to achieve an operating profit since mid-2011, indicating that the net loss recorded by the company in the subsequent period آ«caused by the basic costs of debt serviceآ».

The company''''''''s losses fell by 60 percent to 4.9 million dinars in the first nine months of 2011 compared to losses of 12.3 million dinars in the same period of 2010. Alabdamoghni said that the banks felt that the company آ«client committed in the darkest circumstancesآ», which has created tranquility encouraged her to enter into a restructuring plan.
He declined to disclose the existing creditors of the company, saying only that they آ«were now a local Kuwaiti banksآ», including branches of Gulf banks in Kuwait.

He said the company currently has a cash flow of between 15 and 20 percent of the volume of assets, estimated at $ 83 million, stressing that this liquidity is enough to pay the obligations of the company during the next year آ«without counting future cash flowsآ». The company started already since last year, the application of the rest of the restructuring plan, which eliminated the آ«random recruitment and satiety that existed in the company in generalآ», which resulted in the reduction of expenses of 7.3 million dinars in 2009 to 1.8 million dinars in 2011.
KFIC also stopped speculation on stocks in the stock market depends on investment in generating assets only.

He said that Abulmoghni during the next phase will focus on the management of property of others and introduce new products is characterized by medium-term low risk rate. He stressed that the high volume of deposits in Kuwaiti banks is evidence that there is a shortage in products required to invest the money.