Nancy Reagan
White House Photo in the Public Domain
Al Qabas, as it often does, has a different take on the story about TID proposing a 50% haircut than Al Watan.
Here the story is that the creditors have said that if Dar's request for a 50% haircut proves true, then this will give the Central Bank of Kuwait full justification for turning down its application for the FSL. (You may as I have been struck by this formulation. Either a deficient translation on my part. Or maybe the story of the 50% haircut was wrong).
They also remarked that the Central Bank will never force a restructuring on them without their consent as they are the owners of the money and should decide their fate. So a consensual plan agreed by all parties will be required.
Finally they are quoted as saying that there is an indication that the entity charged with preparing the report on Dar's ability to remain a going concern and pay its debts shares Dar's opinion that it can comply with the financial ratio set in the new Central Bank of Kuwait regulations if it can deal with approximately KD500 million of burden which will strengthen shareholders' equity in addition to bringing it in compliance with the new principles. I'm taking Al Qabas description of the "entity" to mean E&Y. And am not sure why the circumlocution is necessary.
As I've indicated before, I really don't understand the fixation on the new CBK principles. Dar is in a life or death situation with the rescheduling. It seems eminently reasonable that if it can't meet the new regulations that should be a very minor consideration in the greater scheme of creditor repayment and the continued existence of the Company. There are many ways this can be "handled" to preserve the regulation but give Dar some breathing room. Would one really "put down" Dar because it couldn't meet a ratio if it could repay a substantial portion or all of its debt?
All this talk of the regulations makes about as much sense to me as arguing about the poor quality of the band as it plays the final songs just before the Titanic sinks.
Maybe one of my regular readers can tell me precisely what I'm missing.
It's also unclear if this story came before or after this one.
Ah, Kuwait land of mystery and intrigue. And also family values.
It's also unclear if this story came before or after this one.
Ah, Kuwait land of mystery and intrigue. And also family values.
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5 comments:
ya I'm confused by the constant mention of the new regulations... They do not matter in the grand scheme of things, as you said, it is a life and death situation at this point.
Also, the cbk has granted exemptions to at least one other company that said it would not meet the deadline so why are they talking about this?
cbk should just say no now and let the creditors argue with the company about what to do. The cbk quite obviously isn't doing anything useful at this point.
TRC
Which is all the more puzzling.
It would seem a very easy thing for the CBK to say that in view of the situation it had agreed a special plan with TID under which it would implement the new regulations over the period of the restructuring in order to maximize implementation of the restructuring plan.
But something is going on. TID's financials are still not approved.
It's like the CBK is punishing TID.
Or perhaps the personalities involved as shareholders are so very very important and the decision the CBK has to logically make so very very difficult (one that will disappoint them) that it's sitting on its thumbs?
i honestly don't think the CBK would be that petty as to punish the company and shareholders like that.. I think its more a matter of, they know what to do, but don't want to take that step so they're just biding their time.
Also, I'm still curious to know what will happen if companies that aren't compliant by 2012? what are they gonna do, slap some fines on TID? does that help anyone?
TRC
Thanks.
The release of TID's financials is taking an inordinate amount of time though. Even though it takes longer to add up negative numbers than positive ones (one keeps doubling checking to try and find the error that's causing them to be negative), by now the financials should be out.
So who's holding up things? TID? The CBK? The poor auditors?
This says it all - serioushttp://gulfnews.com/business/markets/worldly-wise-investment-dar-s-overlooked-creditors-1.837031ly.
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