AlWatan quotes Ibrahim AlKhazzam, Managing Director, of AIG that they are putting the final touches on their restructuring plan. As envisioned AIG will make its first principal repayment 18 months from signing to give the company sufficient time to recover and implement its restructuring. The plan is to restructure both liabilities and assets (AIG is a significant creditor as well as a debtor).
He noted that liabilities were only 1.9x equity - what he described as a low ratio. Asset values were increasing. He cited a particularly bright future for Aref Energy - with more than KD30 million in cash and no debts - ready to participate in the Government's Five Year Development Plan.
He expects to finish the restructuring in two months - noting that international consulting firms were helping in the process.
As I noted in an earlier post, KFH owns 53% of AIG and to the extent that it puts its financial and market muscle behind AIG, the company should be able to move forward.
Mr. AlKhazzam outlines in this article just how much KFH has done.
First, there was the KD132 million loan extended so that AIG could pay off foreign creditors and investment funds - greatly reducing the complexity of negotiations by eliminating a potentially troublesome set of creditors. And as well demonstrating a very strong vote of confidence by KFH.
What was news to me was that KFH has been not only supporting AIG but its associated companies. Specifically named were Munshaat Real Estate Projects (25% ownership by AIG. KSE Stock #433), Aref Energy Holding (72%, KSE #627), Sukuk Holding (49%, KSE #239). He mentioned that KFH's 100% subsidiary Liquidity Management House was helping AIG negotiate with lenders.
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