Global Investment House (Global) has announced that it concluded the implementation of restructuring agreements entered into with all of its financiers on Dec. 4, 2012, thereby bringing a comprehensive solution to the company's capital structure.
As previously announced, the restructuring transaction resulted in a separation of Global's core-fee businesses from its non-core principal investments and a transfer of its substantially entire debt obligations, resulting in Global effectively becoming a debt-free company.
The majority of non-core principal investment and real estate assets have been transferred to "Asset SPE(s)" specifically created for this purpose. The Asset SPE, namely NAC Ventures SPC has assumed
$1.28 billion of the company's debt obligations and all the accrued interest/profit.
The company has issued 1.22 billion new shares at par value of KD 0.100 per share to another special purpose entity, namely NCH Ventures SPC (NCH) giving it a 70 percent stake in Global. Total new issued capital amounted to KD122.24 million ($428.8 million) thereby bringing the company's total paid up capital to KD174.620 million ($612.6 million).
NCH has assumed $428.8 million of the company's debt obligations. Existing shareholders of the company now have been diluted to 30 percent. Both NAC and NCH are neither owned nor controlled by the company or its existing shareholders. The financial impact of this transaction will be reflected in the Q3 2013 financial results of the company.
After the consummation of transaction, Global's core business comprises the existing asset management, investment banking and brokerage businesses. Further, Global has been appointed as the asset manager of the NAC assets on arm's length commercial terms.
Maha Al-Ghunaim, chairperson and managing director of Global, commented: "Today represents a significant milestone for Global and is the culmination of intensive and constructive discussions with our financiers throughout this process. We are delighted to have achieved this successful outcome and by the overwhelming support financiers have shown Global throughout this process."
Al-Ghunaim added: "We are extremely grateful for the extraordinary efforts of the Coordinating Committee of Financiers consisting of Abu Dhabi Commercial Bank (the chair of the Coordinating Committee), Commercial International Bank (Egypt), Gulf Bank, Kuwait Finance House (Liquidity Management House as the Shariah adviser), Standard Bank and Standard Chartered Bank, and the bondholders' representative The Industrial Bank of Kuwait in facilitating closing of this debt restructuring transaction. I take this opportunity to thank the company's shareholders for their continuous cooperation and our financial and legal advisers for all their hard work and efforts toward the successful conclusion and closing of this transaction. We look forward to focusing our efforts on developing the fee-generating lines of our core business, namely the asset management, investment banking and brokerage pillars of the company, serve our clients and win new business even more effectively," he said.
Padmanabha Mishra from Abu Dhabi Commercial Bank and chair of the Coordinating Committee, said: "The coordinating committee is highly appreciative of the overwhelming support from financiers that has allowed for this successful outcome today. Global's senior management team has displayed proactivity, professionalism and transparency throughout the process, which have allowed us to structure a unique solution that can serve as a template for other debt restructurings in the region."
"We affirm our continued support to the company and wish the management and board every success in driving forward the market leading core business lines of the company. I would like to thank my colleagues at the Coordinating Committee and its financial and legal advisers. Also I would like to extend my thanks to the previous chair of the Coordinating Committee, Arul Kandasamy of ADCB."