Global Investment House has obtained approval from its shareholders to transfer its principal investment assets and real estate investment properties to the Global Macro Fund and Real Estate Holdco respectively.
Both the Global Macro Fund and the Real Estate Holdco are wholly owned subsidiaries of Global.
The shareholders’ approval was also sought to pledge the above-mentioned principal investment assets and real estate investment properties in favour of the company’s financiers in accordance with the terms of the company’s debt restructuring agreements. The shareholders granted their approval to all items of the ordinary general meeting agenda.
As part of the restructuring of Global’s financial indebtedness, a level of security has been offered to the creditors over the Global Macro Fund, which contains Global’s principal investment assets, and Real Estate Holdco, which contains investment properties. There is no security offered over Global Investment House KSCC, its core businesses and related assets, namely the asset management, investment banking and brokerage businesses.
The Kuwait Stock Exchange has granted Global a special approval to transfer securities listed on the exchange and owned by Global through over-the-counter procedures to the Global Macro Fund and/or Global MENA Macro Fund Company. This approval will save Global time and costs associated with transferring listed securities through regular market trades.
The security offered is only triggered upon an event of default, the main triggers for which are non-compliance with mandatory minimum repayments or non-compliance with agreed covenants.
Global is transferring USD1.44bn of principal investments to a wholly owned Global Macro Fund at valuations performed by an independent valuer. 100 per cent of the units of the Global Macro Fund will be owned by a wholly owned (both directly and indirectly) subsidiary of Global.
Global is transferring USD295.1m of real estate assets (investment properties) to Mushaaa Islamic Real Estate Company (the Real Estate Holdco), which is a wholly owned subsidiary of Global at valuations performed by independent valuer.
In substance, Global retains all the risks and rewards of the assets transferred to Global Macro Fund and Real Estate Holdco. Therefore, the International Financial Reporting Standards criteria for de-recognition of assets is not met and the performance of the principal investment and real estate portfolio will continue to impact Global’s financial results.
Core assets, namely majority stakes in brokerages, asset management business and strategic stakes in overseas operations remain un-encumbered.
