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Kuwait Pipes reaches permanent solution to commercial debt of KWD130m

Kuwait Pipe Industries and Oil Services Company (Kuwait Pipes) has signed a settlement term sheet for the commercial debt of around KWD130mn with its participating commercial lenders to bring a comprehensive and permanent solution to the Company’s capital structure.

The settlement term sheet was signed by Abdulkareem Abdullah Al-Mutawa, Board Member and Head of Re-Structuring Committee of Kuwait Pipes, and representatives from five of the Commercial lenders. The signing took place at Global Tower and was attended by Mrs. Maha Al-Ghunaim, Vice Chairman & Group CEO of Global Investment House (Global), the financial advisor to Kuwait Pipes, and representatives from the Commercial Lenders, including Gulf Bank, which acted as the lead bank on the transaction.

The settlement transaction, subject to shareholders’ approval, will result in Kuwait Pipes becoming a commercial debt free company with 80% ownership by the banks. The transaction comprises a Debt-to-Asset swap of secured investments amounting to KWD12m, followed by a Debt-to-Equity swap through a capital increase at par value amounting to around KWD90m, while writing off the balance of the remaining debt. The transaction is expected to be executed during the second quarter of 2015.

Abdulkareem Abdullah Al-Mutawa, says: “Today marks the ending of the company’s difficult situation and allows us to focus on growing our core business. We now expect to focus on our operations and complete the establishment of a new production line, which will add 100,000 tons per annum to the current capacity.

"I take this opportunity to thank the Company’s shareholders for their continuous support, the lenders for their co-operation and our financial and legal advisors for their hard work and efforts in making this transaction a success"

Tony Daher – Deputy CEO of Gulf Bank, says: “We highly appreciate the support from all stakeholders that have contributed to this successful outcome. Kuwait Pipes and their financial advisor have shown professionalism and transparency throughout this process, and all lenders have demonstrated their commitment to completing this transaction and creating a win-win situation to all parties. As the lead bank and on behalf of all lenders, we affirm our continued support to the company and look forward to reviving and growing the business."

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