The Investment Dar - Central Bank to Release 2008 Financials?

What a difference a day makes, apparently.

From its rather negative take in Sunday's edition, AlQabas' Monday edition has a much more upbeat story for TID.

Quoting sources with a strong connection to the Central Bank, AlQ says that yesterday the Central Bank of Kuwait approved TID's 2008 annual report which was caught up for over a year in "back and forth" between the two parties.  In the middle of last March TID submitted amended financials along with accompanying notes on some of the points the Central Bank requested  explaining why they were difficult to implement.  AlQ says that the numbers were agreed earlier.

AlQ's sources tell it that TID's  2008 loss is roughly KD0.078 per share in addition to KD 100 million of provisions.  This seems a bit strange.  If the loss per share is net income, this would include provisions.  Unless what is meant is fair value adjustments which don't pass through the income statement.   With about 945 million shares outstanding that would translate into an approximate KD74 million loss.  Compare that to the KD260 million loss that GIH took with roughly the same size balance sheet.  I'm a bit surprised that TID's loss was so small.  The creditor reaction was much more severe at TID than GIH.  Creditor reaction is usually a function of repayment prospects - both ultimate amount and time to collect.   Let's see what the financials show when they're released. 

Whatever the case, at 30 September 2008, TID had roughly KD416 million in equity.  So KD74 million or even KD174 million would not seem to be major issues. So again it's unclear why the fuss over the approval.  What was TID resisting?  It must have been something important since there's nothing like a restructuring to focus minds on survival.

Having given the 2008 results, AlQ says it's not clear if these numbers were used or if further adjustments were made.  The latter case would contradict the earlier statement that the numbers had been agreed.

It's expected that quarterly financials will be approved much more quickly as the major sticking point was the 2008 financials. The article says that TID's first, second, and third quarter 2010 interim reports are already at the Central Bank.  Presumably a typo for 2009.

The article concludes by stating that this week the Creditors' Co-ordinating Committee will hold a meeting with the management of Commercial Bank of Kuwait to agree a satisfactory formula for resolving the dispute over the Boubyan Bank shares. While several possible mechanism have been discussed no agreement has been reached on a single one.

If true, this article represents the first bit of positive news for TID in some while.  A settlement with Commercial Bank would be another step forward.  The next key hurdle is the decision by the special FSL court as to whether to entertain AlMasar's objection.  If TID can get under the FSL, that will a major and perhaps the decisive step towards implementing the restructuring.