Showing posts with label Aayan. Show all posts
Showing posts with label Aayan. Show all posts

Sunday 17 October 2010

Abyaar Real Estate KD50 Million Asset for Debt Swap?


Citing informed sources, Al Watan reports that Abyaar will sign an asset for debt swap of KD50 million with a group of lenders.  The amount represents 35% of FYE 2009 debt.

The article also claims that additional debt settlement/restructuring agreements are near to signing and will follow in train.

Earlier post on Abyaar here.

Sunday 3 October 2010

Gulf Bank: The Golden "Prize"

 
The Gold's There.  Look Closer.

According to the informed sources of Al Watan, a European Group is now bidding to acquire a significant/meaningful share in Gulf Bank through the services of a Kuwaiti intermediary.  And is therefore bidding against the Qatari Group.

The article goes on to say that GB is expected to declare a profit of KD35 million for the first nine months of 2010.  3Q10 provisioning is expected to be much less than during the first two quarters this year  because GB has provisioned 100% of Saad and Al Gosaibi exposure (KD 120 million!) plus 100% for The Investment Dar, 50% for Global,  and 50% for Aayan Leasing and Investment.

Anyone out there know if the provision levels for TID, Global, and Aayan are Central Bank mandated?  Or if they're just GB's calculations.

I guess Global may be among the worlds leading investment banks  for M&A as Mr. Al Sumait said not so long ago (a post is coming on that topic) but seems to be in rather poor company with respect to its loan repayment prospects.  Half full or half empty?  But nonetheless better than some others.

Monday 27 September 2010

Markaz: Review of Kuwait Investment Sector

 Renovation of Yet Another Proven Business Model In Progress
(Or, Perhaps, A Half Built Mega Project)

Markaz has issued “Kuwaiti Investment Firm Sector Taking Stock Two Years After the Crisis”. The report is an update to one they issued in June 2009.

As usual, good analysis and commentary.

You can obtain a full copy of the report by sending an email to info@markaz.com referring to the title above.

In the interim, some key points from the report.

Let’s start with Markaz’s Conclusion:
“The investment sector in Kuwait has a long way to go on its path towards health especially in light of the Central Bank’s increased oversight on the sector, which may lead to reduced activity among some firms that need to clean house. Given how unpredictable and difficult the sector’s assets are to value, it is difficult to predict the future performance of the sector, especially given the wide variance in case-by-case health.

We are optimistic that 2010 will show a further narrowing in bottom line losses, though we remain skeptical of a return to profit. Not only will companies be looking to offload more of their investments, booking impairment losses in the process, but regional/global equity markets have shown lackluster performance for the year, which may have an adverse impact on both the firm’s quoted investments in addition to the AUMs (thereby reducing fee income), all of which will put downward pressure on the bottom line.”

Historical Performance

I’ll start by noting that the report does not cover all investment companies in Kuwait. It is based on a set of 34 listed companies of which only 28 have reported for 2009. The missing reports include The Investment Dar – which hasn’t issued a financial since 31 December 2008. Nonetheless as with many such studies, it gives a good macro picture.

Earnings in KD millions.

20052006200720082009
945281846(810)(778)
  1. The graph in Markaz’s report gives a good pictorial sense of the variance.
  2. In lieu of a graph, let’s look at statistical measures. All of which are rounded to the nearest integer. The Mean Income over the five-year period is KD97 million. The Standard Deviation (Sample) is 852 and the Standard Deviation Population (762). The SD is between 8x and 9x the Mean. That gives an idea of the variability of income. 
  3. During the first three heady years of hefty profits, no doubt equally hefty bonuses and dividends were paid based on reported income -- largely non cash capital appreciation. Many of these payments also no doubt financed by “wise” lenders - who are now left holding the proverbial bag.
Asset Classification

IFRS 7 requires that companies disclose the basis for the valuation of assets held for sale (similar to FASB 157).
  1. Level 1: Based on quoted market prices in active markets for identical or similar securities. 
  2. Level 2: Based on observable market data – either direct or derived. 
  3. Level 3: Inputs into valuation models are not observable market data.
Markaz’s set of companies assets are distributed as follows. Amounts in KD millions.


FVTPLFVTETOTAL% TOTAL
Level 1264   535   799  34%
Level 2213   365   578  25%
Level 3236   708   944  41%
TOTAL7131,6072,321100%
% Total Investments31%  69%100%  ----

As Markaz notes, the IASB allowed companies to “move” assets from the then inconvenient FVTPL (Fair Value Through Profit and Loss) classification to FVTE (Fair Value Through Equity) which neatly “solved” earnings problems in a time of decline in values.  And, no doubt, achieved its goal of fooling more than a few "wise" investors and lenders.

It would be interesting to see how many Kuwaiti firms availed themselves of this exception to manage their apparent earnings.

It’s not surprising that overall there is a concentration in Level 3 assets given business models. And one could point to firms in the “Developed West” with similar concentrations. But out of national chauvinism I won’t point but merely link.

Appendix 1 lists the ratio for some 32 firms. There’s wide variance.
  1. Gulfinvest International and Al Qurain have 100% of their assets in Level 1.   Noor 85%.  Bayan 84%. Coast 72%. 
  2. On the other hand, National International Holding has Level 3 assets at 87%, First Investment at 70%, Al Safat and Al Mal at 67% and Global at 55%.
The Kuwait Investment Firm Sector in the GCC

Markaz notes that the KIFS dominates the rest of the GCC. No one is bigger. No one fell with a larger thud except two Bahraini-based firms in 2009. Markaz provides some income statement data for Fiscal 2008 and 2009 plus 1H10. What would be even more illuminating would be sector balance sheet size.

Leverage

The new Central Bank of Kuwait regulations impose a maximum 2x leverage ratio on the sector. Even after the debacles in 2008 and 2009, the KIFS’ leverage ratio (Total Liabilities/Total Equity) is a “comfortable” 1.84. It’s only when one starts drilling down into the details that one sees the variance.

Below my calculations based on FYE 2009 financials as in Appendix 2.

FIRMLEVERAGE (TL/TE)
Kuwait Finance and Investment8.32x
Aayan Leasing and Investment5.96x
The International Investor5.88x
Global Investment House4.12x
International Investment Group3.57x
IFA3.29x
Aref Investment Group2.78x

Note: I have not adjusted the above for minority interests – so these are not strictly speaking Central Bank leverage ratios as will become apparent later when we review Markaz’s calculations, though the number of firms with significant minority interests is limited.

When Aayan’s substantial minority interests of KD42 million are eliminated from the calculation the Leverage Ratio jumps to an eye popping 14x (using the financials reported on the KSE).

Asset/Liability Mismatch

Details are on page 7 of the report. Briefly, conventional firms are more balanced than “Islamic” ones. The former with S/T debt of 40% versus S/T assets of 49%. The latter with S/T debt at 79% versus S/T assets at 36%. But this is largely due to the greater progress made in restructuring conventional firms. (Also note this data excludes The Investment Dar).

Review of the Top Five

Markaz then reviews the top five firms: Global, Aref, IFA, TID (using 2008 data) and Aayan.

Here in tabular form are the results of Markaz’s review of these firms’ compliance with the newly imposed Central Bank of Kuwait regulations.

FIRMLEVERAGE RATIO"QUICK" RATIO
Global Investment House  4.11x17%
Aref Investment Group  2.78x16%
IFA  3.28x  9%
The Investment Dar*  4.97x   2%
Aayan Leasing and Investment13.90x  7%
CBK Regulations  2.00x10%

*TID calculated using 2008 financials.

Markaz then discusses these five firms’ financial position.  If you want a quick insight into them and the investment firm sector in general, this report is a must read.

Sunday 5 September 2010

Abyaar Real Estate to Sign Debt Agreement After Eid

Al Watan reports that Abyaar is expected to sign a debt settlement agreement with a major firm after the Eid Holiday. 

The article notes that the company is focused on meeting its obligations as well as completing its real estate projects.  Noting that despite the difficulties in 2009, the Company was able to settle 20% of its liabilities.  While Al Watan doesn't mention it, I'd note that the paydown of the liabilities occurred in close proximity to the Company's successful share issue of some KD52 or so million in September 2009.  That of course was no mean feat given the state of markets.  And Abyaar also increased its capital in 2008 if I'm not mistaken.

The article also notes that Abyaar has just about completed a 40 storey tower in Dubai.  Also that the prudent provisions it has taken against its real estate portfolio will enhance earnings going forward, i.e., the carrying base of assets has been lowered so profit will be higher.  This is  of course just the temporal shifting of profits (or losses) from one accounting period to another and doesn't represent an overall gain in profit for the Company.

ARE started off as a JV between Aayan Leasing and Investment and the AlRashdan Group.   After listing, they each hold about 17% or so of the Company.  There aren't any other disclosed major shareholders.

ARE is listed on the KSE (Symbol 432) and trades at KD26 fils per share a substantial discount from its KD100 fils par value.

Monday 30 August 2010

Aayan Leasing and Investment - 1Q10 Loss of KD7.8 Million


ALI announced its 1Q10 earnings today on the KSE.  As usual only Arabic text  (below) is available. The Central Bank of Kuwait approved release of the financials on 16 August.  There was no explanation for the delay.  Based on "history", I'm guessing that as with the Company's 2009 financials, the delay has been occasioned by the KSE's more than usual scrutiny.

The headline number is a loss of KD7.8 million for the first quarter compared to a loss of KD12.5 for the period the year earlier.  Shareholders' equity is KD23.6 million versus KD89.1 million at 1Q09.  Equity was KD31.2 million at 31 December 2009. 

As you might expect, the auditors have raised a matter of emphasis about the Company's ability to continue as a going concern.  Current Liabilities (KD410 million) exceed Current Assets (KD166 million).  Accumulated losses are KD75 million.  

That last comment has got me scratching my head.  On 10 August ALI held its OGM/EGM in which shareholders agreed to use Reserves of KD37.8 million plus reduce the paid in capital to KD29.6 million (from KD63.9 million) to offset accumulated losses.  They also agreed to a KD10 million capital increase by way of a rights offer at par (KD0.100 per share).  So is it that the legal steps to accomplish this have yet to be finalized?  If so, isn't this fact worth noting?  That is, that the Company is taking steps to rectify the situation. Otherwise readers might infer there is an ongoing unaddressed  violation of Article 171 of the Commercial Companies Law.

The auditors also mention ALI's default on some KD100 million of debt.  In the August 10 OGM/EGM Ali "T" AlGhanem, the Company's Chairman, predicted the signing of a rescheduling agreement within two to three weeks.   KFH is the lead bank on the rescheduling negotiations.

A difficult situation. 


[13:38:23]  بلغت (خسارة) (أعيان) (7.7) مليون د.ك لل3 أشهر المنتهية في 31-03-2010‏
يعلن سوق الكويت للأوراق المالية أن شركة أعيان للاجارة و الاستثمار (اعيان)‏
حصلت على موافقة بنك الكويت المركزي على بياناتها المالية المرحلية للفترة ‏
المنتهية في 31-03-2010، يوم الاثنين الموافق 16-08-2010 ،
وفقا لما يلي:‏
البند       ال3 أشهر المنتهية في 31-03-10     ال3 أشهر المنتهية في 31-03-09
الربح (خسارة)(د.ك)               (7.785.523)              (12.553.455)‏
ربحية(خسارة)السهم (فلس كويتي)   (12.6)                    (20.6)‏
اجمالي الموجودات المتداولة      165.971.276             248.207.741‏
اجمالي الموجودات               510.637.020           595.882.901‏
اجمالي المطلوبات المتداولة      410.252.612             351.840.048‏
اجمالي المطلوبات               441.957.164             458.057.552‏
ِ اجمالي حقوق المساهمين        23.643.193              89.142.376‏
بلغ اجمالي الايرادات من التعاملات مع الاطراف ذات الصلة مبلغ 66.680 د.ك
بلغ اجمالي المصروفات من التعاملات مع الاطراف ذات الصلة مبلغ 1.303.522 د.ك
علما بان تقرير مراقبي الحسابات يحتوي على عدم التأكد المتعلق بالاستمرار
على اساس مبدأ الاستمراريه :‏
دون التحفظ في نتيجتنا ، نلفت الانتباه الى الايضاح 2 حول المعلومات الماليه
المرحليه المكثفة المجمعه و الذي يبين ان المجموعه تكبدت خسائر بمبلغ ‏
ِ8.042.649 د.ك لفتره الثلاثة اشهر المنتهيه في 31-مارس-2010 ، و كان لدي ‏
المجموعه خسائر متراكمه بمبلغ 75.175.026 د.ك ، وكما في ذلك التاريخ تجاوزت ‏
المطلوبات المتداوله للمجموعه موجوداتها المتداوله بمبلغ 225.830.362 د.ك
اضافة الى ذلك ، عجزت الشركة الام عن سداد التزامات دين بمبلغ 99.993.871د.ك
و علقت دفعات سداد المبالغ الاساسيه لالتزامات الدين الى البنوك و المؤسسات ‏
الماليه ، و هي تعمل بفاعليه مع الممولين لاعادة جدولة التزامات ديونها ‏
بالكامل ، ان هذه الظروف مع الامور الاخرى المبينه في ايضاح 2 تشير الى وجود
عدم تأكيد مادي مما يمكن ان يثير شك كبير حول قدرة المجموعه على الاستمرار ‏
في اعمالها على اساس مبدأ الاستمراريه .‏

 

Monday 2 August 2010

Al Joman: Analysis of Loans by Kuwait Economic Sectors



Last month the fine folks at Al Joman Center for Economic Consultancy published a series of reports analyzing loans by economic sectors (as defined on the KSE) except for the Banks Sector.

Looking at aggregate sector data, we can get an idea of the relative size of a sector and thus its relative importance in the national economy. 

Also by looking at the relative borrowings by firms within a sector we can get a better understanding of the dynamics of that sector. Is the sector dominated by one or a few firms? Or is competition fairly widespread? Which firms are the major players in a sector? 

In several sectors the largest firms (measured by debt) are fairly small.  This is a reflection of the overall size of the Kuwaiti economy as well as government dominance in certain economic activities.

But, and there is always a "but" with AA, there are some factors which mean any conclusions we draw are imperfect: 
  1. Al Joman's reports are based only on companies whose shares are traded on the KSE. Private firms are not included. 
  2. We're using debt as a proxy for asset size. This ignores equity, though one might argue in a land devoted to OPM debt is not a bad proxy. 
  3. Not all firms have released current financial reports. 
  4. Companies in certain sectors have borrowed for offshore business and investments. Examples are companies in the Investment Sector or in the Services Sector, e.g., Zain or Agility. Thus, there is some external "noise" in the numbers.
But, (a word used almost as often on SAM as "interesting"), we can get a reasonable macro idea or directional perspective from the data we have.

Before we do, some technical "directions" to make your navigation of the reports as useful and easy as possible.  This KSE link will take you to the English language drop down menu for Sectors and the list of companies comprising each Sector. Each company is shown and its Stock Symbol Number. Those SSN's are important (especially for those who don't read Arabic, the language of Al Joman's reports) because the data in Al Joman's report for each Sector is roughly in SSN order. A click of the language button on the right عربي will get you to the Arabic language page. And this link to Al Joman's report page.

Let's begin with an overview via Al Joman's 7 September report - their initial report meant as a macro summary.

All amounts are in KD millions.

Sector31 Mar 1030 Jun 09
Investment  5,747  5,937
Insurance       17       30
Real Estate  1,978  1,835
Industry  1,845  1,853
Services  3,916  4,347
Food     171     198
Parallel Market       65       33
TOTAL13,74014,233
 
As you look in the individual Sector reports, you'll notice that the total loans do not exactly agree to those shown in the above table. The differences are relatively minor and, to repeat myself (another common occurrence at SAM) can be ignored as we are looking for a macro perspective and general "directional" trends. 

For those, like AA, for whom no nit is to small to pick, here is an updated table. No, in an uncharacteristic move, I didn't refoot the detail to make sure these totals tally to the detail.

Sector31 Mar 1030 Jun 09
Investment   5,668  5,937
Insurance        17       30
Real Estate   1,963  1,838
Industry   1,845  1,853
Services   3,936  4,355
Food      171     198
Parallel Market        66       33
TOTAL13,66614,244

Since the first table adds to 13,739 for 31 March 2010, presumably due to rounding, the difference  between the original and adjusted tables is "off" by one.   
 

In the Investment Sector (51 firms) of the 5 largest borrowers 4 are distressed. KIPCO being the one "happy" firm. 

Data in KD million as of 31 March 2010. Total Loans at 1Q10 were KD5,668.

FirmAmount% Total Loans
Investment Dar   96317.0%
KIPCO   61910.9%
Global Investment House   58810.4%
Aayan Leasing    416  7.3%
Aref Investment   339  6.0%
TOTAL2,92551.6%

 

In the Insurance Sector (7 firms) only 3 firms have loans, خليج ت (Gulf Insurance) at KD10.8 and اهلية ت AlAhleia at KD5.3 account for 92.6% of the 1Q10 total. AlAhleia having reduced its borrowings by roughly KD11 from 2Q09. 

In the Real Estate Sector (36 firms) there is no similar dominance. The largest borrower is تمدين ع (Tamdeen) with KD219 or 11.1% of the total as of 1Q10. Al Joman has not reported on لؤلؤة (Lu'lu) Pearl Real Estate or صفاة عالمي (Safat Global). Safat last reported FYE08 when it had KD15. Pearl 3Q09 when it had KD41. If you're looking at the KSE Sector page, note there is no stock with symbol 407. Also Al Joman has جراند (Grand) out of order in its list – using the KSE Symbol Number order as the right one.

In the Industry Sector (28 firms), صناعات (National Industries Group or NI Group) dominates with KD969.7 or 52.6% at 1Q10. The next largest firm أنابيب (Kuwait Pipe Industries and Oil Services Company) has only KD163. 

In the Services Sector (59 firms) زين  (Zain) and أجيليتي (Agility) dominate accounting for roughly 48.6% of total loans at 1Q10 with KD1,556 and KD356 million respectively as compared to 2Q09 when they were 59.1% with KD2,164 and KD411 respectively.

In the Food Sector (6 firms) the aptly named اغذية "Food" (Americana) dominates with roughly 92.2% of 1Q10 loans with KD157.7. And as the slogan now goes "Americana – 100% Arabian".  And note that United Food Industries Group's symbol is almost the same as Americana's, except UFIG has the definite article "أل" in front, i.e., الغذائيةBe careful when placing that order with your broker!

In the Parallel Market (14 firms) صفاة عقار (Safat Real Estate) at KD19.8, ميدان (Maydan) at KD18.3 and عمار (Emaar) at KD11.2 account for 74.5% of 1Q10's total. Again note that the KSE list has gaps missing in the sequential order.  Symbols 2001, 2002, 2004, 2009, and 2016 are not used.

Thursday 22 July 2010

Aayan Leasing and Investment - MOCI Shareholders' Meeting 10 August


Aayan (no doubt with a bit of encouragement from the MOCI) announced on the KSE this morning that its ordinary and extraordinary general shareholders' meeting will be held on 10 August at the MOCI premises at 11 AM.   I expect this will be an "interesting" meeting as the centerpiece will be the MOCI's presentation of its report on the Company's financial condition as well as certain violations it believes have occurred.

The KSE also noted that it had not yet finished its review of ALI's  2009 financials and would publish them once it completed the review.


[11:43:59]  ِ.اجتماع الجمعيه العمومية لشركة اعيان للاجارة والاستثمار ( اعيان )‏
يعلن سوق الكويت للاوراق المالية بأن شركة اعيان للاجارة والاستثمار (اعيان)‏
شركة موقوفه عن التداول لعدم تزويد ادارة السوق ببيانات 31-12-2009 وبيانات ‏
ِ31-3-2010 وقد افادتنا بانه قد حدد موعد لاجتماع الجمعيه العمومية العادية
والغير عادية يوم الثلاثاء الموافق 10-8-2010 في تمام الساعة الحادية عشر
صباحا في وزارة التجارة والصناعة .علما بأن ادارة سوق الكويت للاوراق ‏
المالية لم تنتهي من دراسة البيانات المالية السنوية عن السنه المالية ‏
المنتهية في 31-12-2009 والتى تم تقديمها لادارة السوق بتاريخ ‏
ِ18-7-2010 وسيتم خلال اجتماع الجمعيه العمومية العادية والغير عادية ‏
مناقشة جدول الاعمال المرسل للمساهمين ‏
وسوف تقوم ادارة سوق الكويت للاوراق المالية بنشر بيانات 31-12-2009 ‏
لشركة اعيان الموقوفه حاليا عن التداول فور الانتهاء من دراسة البيانات ‏
المالية للشركة ‏

Wednesday 21 July 2010

Aayan Leasing and Investment - MOCI to Press Forward with Shareholders' Meeting

Muhammad Sha'baan at AlQabas reports that the Ministry of Commerce and Industry is determined to push forward with the shareholders' general meeting it has called and which will take place in early August.  At that meeting the MOIC will deliver its report to shareholders on the Company's financial condition as well as violations of various laws and regulations committed by the Company - including the delay in releasing financial statements, holding the required shareholder's annual meeting along with other unspecified violations.

As per the article, the MOCI does not intend to tell the shareholders what to do but expects that they will in light of its report take action.  It will also refer certain violations to the Public Prosecutor for investigation.

The Company has apparently tried to get the MOCI to let it set the agenda for the meeting.  The MOIC has refused and has noted that the shareholders' meeting it has called will take place prior to any OGM that the Company may call. 

Apologists for the Company have reportedly argued that the Company was unable to secure the Central Bank of Kuwait's approval of its financials until just recently and so it shouldn't be held accountable for the delay in financials.  Further as financials are a condition precedent to an OGM, neither should it  be blamed for the failure to hold the OGM.   Critics have retorted that the Company delayed in providing certain information to the Central Bank and is therefore, after all, culpable.

Tuesday 20 July 2010

Aayan Leasing and Investment - Press Release on 2009 Financials


Below is Aayan's announcement of its 2009 financial results from the KSE.  As usual Arabic only.  If you're wondering why Total Liabilities and Equity don't foot to Total Assets of KD510 million, the difference is Minority Interests of KD 42 million.

Looking at Aayan's 3Q09 financials, it's pretty clear that the bulk of the loss was due to the watchful eye of the Central Bank of Kuwait which no doubt suggested that ALI recognize  in 4Q09 an additional KD50 million of its full year losses of KD77 million.  That latter figure includes the share of Minority Interests in the loss - roughly KD3.8 million.  When the full report becomes available, it will be possible to refine that calculation. 

For those who don't read Arabic:
  1. The first line is net profit/loss.  KD(73.3) million
  2. The second net profit/loss per share.  KD(119.18)
  3. The third current assets.  KD162.2 million.
  4. Then total assets.  KD510.1 million.
  5. Then current liabilities.  KD400.4 million.
  6. Then total liabilities.  KD436 million.
  7. Then shareholders' equity (excluding minority interests).  KD31.2 million.
  8. 2009's figures are on the right with comparable 31 December 2006 figures on the left. 
  9. And to facilitate your reading, I've included after each of the categories above the rounded 2009 figures.
That information is followed by standard details on related party transactions:  KD0.321 million of income and KD4 million of expenses.  The fact that the Board has decided to recommend against a cash dividend for 2009.  The longish bit is an extract from the auditors' comments on the Company's financial condition (summarized in my post yesterday so I won't repeat here) along with the comment that ALI's accumulated losses exceed three-quarters of its legal capital and so in accordance with Article 171 of the Commercial Companies Law it is required to call an extraordinary shareholders' meeting to come up with a solution.  The options are  (a) raise new equity, (b) reduce capital or (c) dissolve the Company.   A solution can involve both options (a) and (b).

[8:17:36]  مجلس ادارة (اعيان) يوصي بعدم توزيع ارباح عن عام 2009‏
يعلن سوق الكويت للأوراق المالية بان شركة اعيان للاجارة والاستثمار (اعيان)‏
افادت ان مجلس الادارة قد اجتمع يوم الاثنين الموافق 12-07-2010‏
واعتمد البيانات المالية السنوية للشركة للسنة المالية المنتهية في 31-12-09‏
وفقا لما يلي:‏
ِ1) نتائج أعمال الشركة:‏
البند             السنة المنتهية في 31-12-09   السنة المنتهية في 31-12-08‏
الربح(الخسارة) (د.ك)           (73.358.493)            413.729‏
ربحية (خسارة)السهم(فلس كويتي)   (119.18)                 0.68‏
اجمالي الموجودات المتداولة     162.182.723       259.676.790‏
اجمالي الموجودات              510.109.513        600.822.985‏
اجمالي المطلوبات المتداولة     400.371.774       333.762.993‏
اجمالي المطلوبات               436.985.779      450.438.515‏
اجمالي حقوق المساهمين        31.200.238        101.523.604‏
بلغ اجمالي الايرادات من التعاملات مع الاطراف ذات الصلة مبلغ 321.117 د.ك
بلغ اجمالي المصروفات من التعاملات مع الاطراف ذات الصلة مبلغ 3.997.962 د.ك
علما بان موافقة بنك الكويت للاوراق المالية على هذه البيانات كانت بتاريخ
ِ07-07-2010 .‏
ِ2) التوزيعات المقترحة:‏
أوصى مجلس ادارة الشركة بعدم توزيع اى ارباح عن السنه الماليه المنتهيه
في 31-12-2009 . علما بأن هذه التوصيه تخضع لموافقه الجمعيه العموميه ‏
والجهات المختصه .‏
علما بان تقرير مراقبي الحسابات يحتوي على التالي :-‏
ِ1- عدم التأكد المتعلق بالاستمرار على اساس مبدا الاستمرارية :‏
دون التحفظ في رأينا ، نلفت الانتباه الى الايضاح رقم 2 حول البيانات ‏
المالية المجمعة والذي يبين ان المجموعة تكبدت خسائر بمبلغ 77.175.466 د.ك
للسنة المنتهية في 31 ديسمبر 2009 ، وكان لدى المجموعة خسائر متراكمة ‏
بمبلغ 67.505.320 د.ك ، وكما في ذلك التاريخ تجاوزت المطلوبات المتداولة
للمجموعة موجوداتها المتداولة بمبلغ 225.892.585 د.ك . اضافة الى ذلك ، ‏
عجزت الشركة الام عن سداد التزامات دين مبلغ 78.065.913 د.ك وعلقت ‏
دفعات سداد المبالغ الاساسية لالتزامات الدين الى البنوك والمؤسسات المالية،
وهي تعمل بفاعلية مع الممولين لاعادة جدولة التزامات ديونها . ان هذه الظروف
مع الامور الاخرى المبينة في ايضاح 2 ، تشير الى وجود عدم تأكد مادي مما ‏
يمكن ان يثير شك كبير حول قدرة المجموعة على الاستمرار في اعمالها على ‏
اساس مبدأ الاستمرارية .‏
ِ2- الامور القانونية والرقابية الاخرى :‏
ووفقا للمادة رقم 171 من قانون الشركات التجارية ، حيث ان الشركة الام قد ‏
خسرت اكثر من ثلاثة ارباع رأس المال ، يجب على مجلس ادارة الشركة ‏
الام الدعوة الى عقد جمعية عمومية غير عادية لمناقشة خطط الشركة الام ‏
في المستقبل .‏

Aayan Leasing and Investment - 2009 Losses of KD73.2 Million


Aayan Leasing and Investment has reported its 2009 earnings and they are dismal:
  1. A net loss for the year of KD77,175,466.
  2. Accumulated losses of KD67,505,320
  3. Current Liabilities exceed Current Assets by KD225,892,585
  4. Default on KD78,065,913
  5. Breach of Article 171 of the Commercial Companies Law = Loss of more than 75% of legal capital.
Not a pretty picture, but I suspect still prettier than what happens to creditors and shareholders.

Monday 12 July 2010

Aayan Leasing and Investment - Financial Stability Law is the Last Refuge


Muhammad Shabaan at AlQabas has an article in the 12 July issue with the headline:  "Aayan:  FSL the Last Refuge."  Which I suppose is perhaps an apt update of Samuel Johnson's April 1775 aphorism - at least in this case.

The article quotes financial sources that the Company is considering resorting to the FSL as it has been unable to reach agreement with its creditors.  Negotiations began over two years ago with the lead bank (KFH, I think), then morphed into multilateral negotiations.  No real progress has been made.  The Company has reportedly stopped servicing its debts.

Some lenders are planning to provision 50% of their outstandings - which is given as evidence that not much more progress is expected.  And which is it suggested will make progress more difficult. 

The article closes by noting that changes in the executive suite will be forthcoming.

It also repeats market talk that Aayan's 2009 financials submitted to the Central Bank some time ago (not specified how long) show a KD40 million loss.  And that the CBK and ALI have not yet been able to agree on the numbers.

If this is true and note that all we have is a market rumor, then ALI's 2009 FYE equity is probably around KD59 million.  That's derived in case you wonder from 3Q09's KD71 million plus and additional KD12 million in losses for 4Q09.

I'm going to go out on a limb here.  I suspect that's because CBK thinks the loss and any asset writedowns should be larger rather than smaller.  Though we did have one Islamic bank state earlier today that it had taken the option of increasing provisions to enhance its financial position.  Maybe the CBK is unlike the Central Bank of Bahrain not open to such moves.  (In case you're wondering, in a radical departure from most comments you read here, that comment is made with tongue firmly in cheek).

Monday 14 June 2010

Aayan Leasing and Investment - Recourse to Financial Stability Law Remains a Possibility


AlQabas quotes Aayan as saying that the Central Bank of Kuwait has not told it to refrain from using the Financial Stability Law as an option to deal with its problems.  Instead the Central Bank has been urging the Company to take the appropriate decision in the interest of creditors and shareholders to exit its financial crisis as soon as possible.

Aayan said that it will continue in a positive manner with its creditors.  And that if it decides to use the FSL, it will only do so after consultation with its creditors.

You'll recall from earlier posts (which  you can retrieve using the label "Aayan") that the Company has some KD416 million in debt.  As well KFH is a significant shareholder and seems to be trying to shepherd this case to a positive conclusion.

Sunday 23 May 2010

Aayan Leasing and Investment - Restructuring Update


AlWatan reports that despite marathon meetings with local creditors last week in which Aayan reportedly agreed to all the demands by its local lending banks, including the unnamed "Lead Bank" (which I believe is Kuwait Finance House), no real progress was made.  ALI supposedly agreed to priority of payment, a clear mechanism for guarantees and collateral, and payment schedules for each bank, subject to the approvals of foreign lenders - whose portion of the debt does not exceed 25% according to the article.

The last financials I saw for ALI - 3Q09 - had debt at roughly KD416 million.

The article notes that the Lead Bank also discussed with ALI increasing its ownership.  If you look at the KSE website, you won't see any banks listed as shareholders.   If I remember correctly, KFH disclosed that it indirectly owned some 16% of ALI in its FYE2009 report.

Perhaps, one of my readers out there can explain why AlWatan didn't mention the Lead Bank's name.  Is that because it's so widely known, no mention is required?  Or is it out of a delicate sensibility not to finger KFH has having a large share in this exposure?

Thursday 1 April 2010

Kuwait Stock Exchange Suspends Trading in 15 Additional Companies For Failure to Provide Financials


At 8:48 AM Kuwaiti time the KSE issued the below list of companies whose trading was suspended due to failure to provide financial statements for the period ending 31 December 2009.

While 21 companies appear in the list, 6 of them were previously suspended for failure to provide earlier financial statements.   That means an additional 15 companies have been suspended.

If and when these companies provide the missing financials to the KSE, their trading will be resumed.

In order the companies are:
  1. AlAhlia Holding
  2. AlBayt/Securities House
  3. Industrial and Financial Investments Co.
  4. International Investments Group
  5. Aref Investment Group
  6. The Investment Dar (previously suspended)
  7. Aayan Leasing and Investment
  8. Gulfinvest International
  9. KFIC (Kuwait Company for Financing and Investment)
  10. International Leasing and Investment (previously suspended)
  11. National Real Estate Co (NREC)
  12. Pearl Real Estate (Lu'lu)  (previously suspended)
  13. Investors Group 
  14. Grand Real Estate  
  15. Safat Global (previously suspended)
  16. Agility
  17. The Sultan Center
  18. Saftec
  19. Villa Moda (previously suspended)
  20. Shabka Holding Company (previously suspended)
  21. UFIG (United Food Industries Group)
Using KSE definitions of the main economic sector of activity as per the company's stated purpose, of the suspended companies:
  1. 10 are from the Investment Company Sector
  2.   5 from the Real Estate Sector.
Though it's a reasonably good assumption that the problems at the other companies - save Agility - are probably largely related to securities or real estate investments.

[8:48:12]  ِ.وقف التداول باسهم شركات اعتبارا من اليوم ‏
يعلن سوق الكويت للاوراق المالية انه قد تم وقف التداول باسهم 21 شركة ‏
وهى الشركات التالية :‏
الشركة الاهلية القابضة (اهلية) ‏
شركة بيت الاوراق المالية (البيت)‏
شركة الاستثمارات الصناعية (ا صناعية) ‏
المجموعة الدولية للاستثمار(المجموعة د) ‏
شركة مجموعة عارف الاستثمارية ‏(عارف)‏
شركة الدار للاستثمار (الدار)(موقوفة) ‏
شركة اعيان للاجارة والاستثمار (اعيان) ‏
الشركة الخليجية الدولية للاستثمار (غلف انفست) ‏
الشركة الكويتية للتمويل والاستثمار (كفيك)‏
الشركة الدولية للاجارة والاستثمار(د للاجارة) (موقوفة) ‏
الشركة الوطنية العقارية (وطنية) ‏
شركة لؤلؤة الكويت العقارية (لؤلؤة) (موقوفة) ‏
شركة مجموعة المستثمرون القابضة (المستثمرون)‏
شركة المشروعات الكبرى العقارية (جراند)‏
شركة الصفاة العالمية القابضة ‏(صفاة عالمي)(موقوفة) ‏
شركة المخازن العمومية (اجيليتي) ‏
شركة مركز سلطان للمواد الغذائية (م سلطان) ‏
شركة الصفاة تك القابضة (صافتك)‏
شركة فيلا مودا لايف ستايل (فيلا مودا) (موقوفة) ‏
شركة الشبكة القابضة (الشبكة)(موقوفة  ) ‏
شركة المجموعة المتحدة للصناعات الغذائية (الغذائية) ‏
اعتبارا من اليوم الخميس الموافق 01-04-2010 ،وذلك لعدم تقديم ‏
البيانات المالية السنوية للسنة المالية المنتهية فى 31-12-2009 ،فى ‏
الموعد المحدد لذلك.‏