International Leasing and Investment Company - Attempt to Stack Board?

Al Qabas has a follow-up to their earlier report of the resignation of 3 directors at ILIC.  See earlier post on that topic here.

1. The Company has supposedly written to the MOCI requesting that it approve the replacement of Mr. Mohammed Al-Jasser with Mr. Basil Al Mutawa (a relative of Mr. Bassim Al Mutawa one of the major shareholders).  If this is approved then Abraj Holding/Boubyan Bank would not be represented on the Board despite AH's 32.3% share in the Company.  Boubyan has made a loan to Abraj and its representation on ILIC's Board was no doubt a way of looking after its interests in the collateral.
2. Also the Central Bank is said to have approved ILIC's 2008 financials which reportedly show a loss of US$120 million with the result that shareholders' equity was reduced to US$45 million.  Loans are said to remain at 2007's level:  US$600 million.  The CBK has, it is said, reservations on the financials.  And the auditors are refusing to give an opinion.
3. The two directors from the Islamic Development Bank are still tendering their resignations given their concern that the actions being taken are not in the interest of rescuing the Company.  Official bodies are reported to have rejected charges levied against the two directors as inventions and levied by parties who want to take control of the Company without involving other shareholders.
4. When the 2008 financials are released various infractions will be disclosed.  It's said that the auditors have concerns about the use to which loans were put.
5. The same parties behind the Board machinations are reported to be trying to block Mr. Faisal Al Zamil (Kuwait's representative on the IDB Board) from assuming a position in executive management  in the Company in order to enable them to put in someone who will look after their interests.
6. Finally creditors are said to be disgusted with the developments at the Company.

As I mentioned earlier, IDB and Abraj Holding, control over 60% of ILIC and should be able to take control of the Board.  If the Central Bank can finalize ILIC's financials, then the MOIC can call for a shareholders' meeting and presumably the majority of shareholders can vote in their own candidates for the Board - at least a majority.

Boubyan Bank to Liquidate Shares Owned by Awal Bank to Partially (Very Partially) Collect Debt

Mohamed Sha'ban at Al Qabas reports that having received judicial authority, Boubyan will sell some 300,000 shares in International Finance Company on the KSE to partially settle a debt of SAR 111 million owed by Awal to it.  Furthermore it will sell some 61,000 Global GDRs listed on the LSE through the manager of the fund holding the  shares.

Since AlDawliah is trading at around KD0.250 per share the recovery is half of that pictured above.  A penny on a dollar of debt.

The Investment Dar and Commercial Bank of Kuwait - Settlement of Boubyan Bank Shares

Quoting informed banking sources, AlQabas reports that Commercial Bank of Kuwait has proposed to TID that the BB shares be sold and that any amount remaining after the settlement of TID's obligations to  CBK will then be remitted to TID.

In effect then, CBK is proposing to treat the transaction as a secured loan rather than a failed repurchase agreement.  Under the latter, CBK would be entitled to absolute ownership of the shares with no payment at all to TID.

Clearly, CBK doesn't want to enter into the rescheduling as one of the creditors and share the BB shares (very good collateral) with the entire set of creditors in return for "security" in the pool of what Adnan Al Musallam has more than once described as "strong" assets (which are probably less "strong" and certainly less liquid than Boubyan's shares). 

There is a reason why some creditors lend on a secured basis as opposed to an unsecured one.   They get to pick the collateral that gives them the credit comfort they need to extend the loan.  And know that if the borrower doesn't pay, they have a second way out that doesn't involve a rescheduling.

The proposal seems an eminently reasonable solution.  

As the parties have haggled over this problem, they lost a chance to conclude a quick sale with a willing buyer with deep pockets (National Bank of Kuwait).   Perhaps, the Central Bank can be persuaded to allow NBK to buy another 19.196%.  The share price is an attractive KD0.560.

National Bank of Kuwait - Boubyan Bank Share Purchase Authorization

NBK announced on the KSE today that the authorization it received from the Central Bank of Kuwait to purchase up to 60% of the shares in Boubyan Bank expires 22 June 2010 not 20 May 2010 as previously reported.

This  gives a little more breathing room to Commercial Bank and the Investment Dar to work out a deal so they can sell to NBK.

[11:23:20]  ِ.ايضاح من (وطني) بخصوص المهله المحدده لتملك حصة في (بوبيان)‏
يعلن سوق الكويت للأوراق الماليه ، عطفا على اعلانه السابق بتاريخ ‏
ِ28-03-2010 و الخاص بموافقة بنك الكويت المركزي ‏على رغبة بنك الكويت
الوطني بشراء حصه بحد أقصى 60% من رأسمال بنك بوبيان لمدة ثلاثة
أشهر ، يفيد البنك بأن المهله الممنوحه من بنك الكويت المركزي تنتهي في ‏
ِ22-06-2010 و ليس كما ذكر سابقا بأنها تنتهي في 20-05-2010 .‏

The Investment Dar - Commercial Bank of Kuwait - Boubyan Bank

AlQabas has a report that Jamal AlMutawa, the former GM of CBK, was in the bank to assist with negotiations with TID (being run as per the article by TID's Chief Restructuring Officer) to solve the dispute over the BB shares.  Jamal was "in charge" when CBK and TID agreed the repurchase transaction in 4Q08 which led to CBK asserting final ownership of the shares when TID failed to repurchase them in 2009.  So presumably he's there to share what he knows about the genesis of the original deal and what promises and understandings both parties had at the time.

Reportedly the deal will preserve the rights of CBK to its money - this in effect sounds like the transaction is being treated as a secured loan rather than a sale/repurchase transaction.  Presumably, CBK not only wants it principal plus interest back - but as well to be excused from the restructuring.    The CRO, Mike Grant, is quoted as saying that any excess after CBK is paid its dues will accrue to TID.

The rest of the article deals with the resignation of Mr. AlRabah as Chairman of CBK and speculation that a ordinary general meeting of shareholders may be called if the call to a reserve director is unsuccessful.

AlAbraj Holding "Small" Shareholders Call for Emergency Ordinary General Meeting

PLEASE NOTE THIS POST IS ABOUT A KUWAITI COMPANY, NOT THE UAE COMPANY ABRAAJ.

Both AlWatan and AlQabas report that small shareholders in excess of the 10% required under Kuwaiti Commercial Law have banded together and engaged a law firm to raise a complaint against the Ministry of Commerce and Industry and the Kuwait Stock Exchange for failure to discharge their supervisory duties with respect to AHC and to lodge the formal demand that the MOCI call an emergency ordinary general meeting of shareholders.  The meeting would be designed to protect the rights of the small shareholders in the company, including the right to elect a new board.

You'll recall the Boubyan Bank is pursuing a legal case to have AHC declared bankrupt.  

Also AHC is currently suspended from trading on the KSE for failure to provide its financials  for 31 October 2009 and 31 January 2010 within the required time.

The AlQ article is longer and has some more details, including that the Boubyan debt was incurred to purchase a majority stake in International Leasing and Investment.    According to the KSE, AHC  currently owns some 39.28% of ILI.

With respect to AHC itself small shareholders own 58.5% of the company and large shareholders some 41.5%.

The Investment Dar - Creditors Press for Movement on Asset Sales

AlQabas has a report on the meeting in Dubai between TID and the Creditors' Co-ordinating Committee this Tuesday.

Here are the key points from the article.

The first topic discussed was the sale of Boubyan Bank shares where the desire is to get the best possible price.  Mike Grant, the Chief Restructuring Officer, is reported to have briefed on a meeting with National Bank of Kuwait in which they evidenced continuing interest in purchasing the shares assuming that TID and Commercial Bank can come to an agreement.  NBK is said to want to purchase at the market price.  The article then mentions that the price should be no less than KD0.600 per share.  BB has been trading at around KD0.540 to KD0.560 the past few days.  So I suppose that's not an unreasonable price. The article notes that the BB shares are outside the asset realization program under TID's restructuring so that they are not pressed to sell them.  NBK is awaiting a formal written response on the potential sale, including the proposed sales price.

The second topic has to do with the sale of assets that are subject to the restructuring.  Nothing has been done until now because of the previous legal cases which frustrated the closing of the restructuring.  Now with TID's entrance under protection from the Financial Stability Law, it's expected apparently that up to eight more months may pass before the restructuring will be finalized.  Since TID has to pay 5% of the principal amount during the first year, the lenders are encouraging the company to develop a clear asset sales plan so that it will be ready to spring into action when legal formalities are completed.  One target is to have foreign assets ready as the expectation is that these will be able to be sold quicker than Kuwaiti assets.

The Company has written expressing its commitment to move forward, but has apparently noted that there might be circumstances outside its control - a decision by the FSL Court or the Central Bank.  No doubt, this message sent more than one shiver down the creditors' spines.  And probably revived some of the previous concerns about management - the sort that motivated creditors to ask the Central  Bank to put a monitor into TID.  TID's letter in this regard has been forwarded to the Creditors' Co-Ordinating Committee's lawyers for study.

The Investment Dar - More on 2008 Financials: No Audit Opinion

TID released a formal announcement on the KSE today (text below, Arabic only) about its fiscal 2008 financials.

The major piece of new "news" was that TID's auditors had not given an audit opinion.  Technically, what they've done is issue a "disclaimer" stating that they were unable to obtain sufficient information in order to render an opinion.

Two reasons cited:

1. TID's ability to function as a going concern depends on the rescheduling and it is unclear whether that will go forward.
2. TID is engaged in a dispute over ownership of shares in a bank listed on the KSE (that's Boubyan Bank) with another Kuwaiti bank (that would be Commercial Bank of Kuwait).  TID's 2008 consolidated financials carry the BB shares at KD142 million while the value of the debt related thereto is KD75 million.   And TID's auditors have been unable to determine if an adjustment to TID's financials is warranted.  

Regarding the latter, in the worst case, if Commercial Bank of Kuwait were to be judged the owner of the BB shares, then TID would have to recognize a loss of some KD67 million (roughly one-third of its 2008 capital of KD201 million).  And of course if TID were judged to be the owner, then there would be no adjustment to its financials.

Of course 2008 is long ago and far away in terms of judging impact.  What will be critical will be the path of asset values since 31 December 2008.

Here's the KSE announcement.

[12:35:19]  ِ.مجلس ادارة (الدار) يوصي بعدم توزيع ارباح عن السنة المنتهية في 31-12-08 ‏
يعلن سوق الكويت للأوراق المالية بان شركة دار الاستثمار ‏
قد حصلت على موافقة بنك الكويت المركزي على بياناتها المالية
للسنة المالية المنتهية في 31-12-2008، بتاريخ 13-04-2010‏
وقد احيط بنك الكويت المركزي علما بمضمون البيانات المالية الختامية المجمعة
للشركة عن السنة المنتهية فى 31-12-2008 الواردة الى بنك الكويت المركزي ‏
وفق كتاب الشركة المؤرخ فى 15-03-2010 ،اخذا بالاعتبار ما ورد فى ‏
تقرير مراقبي الحسابات وكما هو مبين فى الايضاحين (2,16) من ان قدرة ‏
المجموعة على متابعة انشطتها طبقا لمبدأ الاستمرارية تتوقف على اعادة جدولة ‏
شروط التزاماتها مع الدائنين ،وكذلك ما جاء فى تقرير مراقبي الحسابات ‏
بشان "عدم القدرة على ابداء الراي" من انه نظرا لجوهرية الامور ‏
المذكورة بفقرات اساس عدم القدرة على ابداء الراي ،فانهم لا يبدون ‏
رايا على هذه البيانات المالية المجمعة .‏
وفقا لما يلي:‏
ِ1) نتائج أعمال الشركة:‏
البند             السنة المنتهية في 31-12-08   السنة المنتهية في 31-12-07‏
الربح(خسارة)(د.ك)              (80,313,260)        132,037,980 ‏
ربحية(خسارة)السهم(فلس كويتي)   (87,45)               140,58 ‏
اجمالي الموجودات المتداولة     365,796,380       659,501,254 ‏
اجمالي الموجودات              1,200,531,431    1,259,618,796 ‏
اجمالي المطلوبات المتداولة      817,461,744       644,627,427 ‏
اجمالي المطلوبات                999,118,504      871,989,478 ‏
اجمالي حقوق المساهمين         201,412,927       387,629,318 ‏
بلغ اجمالي الايرادات من التعاملات مع الاطراف ذات الصلة مبلغ 8,135,295 د.ك
بلغ اجمالي المصروفات من التعاملات مع الاطراف ذات الصلة مبلغ 4,560,000 د.ك
ِ2-التوزيعات المقترحة :‏
قرر مجلس ادارة الشركة عدم توزيع ارباح عن السنة المالية المنتهية فى ‏
فى 31-12-2008 ،علما بان هذه التوصية تخضع لموافقة الجمعية العمومية ‏
والجهات المختصة .‏
علما بان تقرير مراقب الحسابات يحتوي على اساس عدم القدرة على ابداء الراي:‏
ِ-كما هو مبين في الايضاحين (2.16) من هذه البيانات الماليه المجمعه : بتاريخ
ِ8-10-2008 تخلفت الشركة الام عن سداد تسهيلات وكاله ولاحقا توقفت عن
سداد كل الديون و الارباح المتعلقه بها المستحقه لصالح الدائنين ( البنوك و ‏
المؤسسات الماليه و اخرون ) بعد تاريخ التخلف عن السداد اعلاه : و قد أدى ‏
ذلك التخلف عن السداد الى ان اصبحت الشركة الام متخلفه عن سداد ديونها
وفقا لشروط التخلف عن السداد المنصوص عليها في اتفاقيات الديون الاخري
و بالتالي ادي ذلك الى عجز المجموعه عن الوفاء بإلتزامات ديونها بالكامل .‏
كذلك قام بعض الدائنون برفع قضايا لدى محاكم الكويت متضمنه اشهار افلاس ‏
الشركة الام للحصول على مستحقاتهم بالاضافه لذلك بلغت صافي خسائر ‏
المجموعه 80 مليون د.ك تقريبا عن السنه المنتهيه في 31-21-2008 كما توجد
مخالفه لشروط الاتفاقيات المبرمه مع الممولين مما يقتضى السداد الفورى لتلك
الالتزامات .‏
هذا و تعمل المجموعه حاليا على التفاوض مع الممولين لاعادة هيكله ديونها ,‏
و قد اصبحت قدرة المجموعه على متابعه اعمالها على اساس مبدأ الاستمراريه ‏
تستند بشكل كبير على النجاح في هذه المفاوضات . لم نتمكن من الوصول الى
أدله تدقيق موثوق فيها و كافيه لتحديد مدى قدرة المجموعه على الوصول الى ‏
اتفاق بشأن اعادة هيكلة الديون المستحقه عليها .‏
ِ- كما هو مبين في ايضاح رقم (12) من هذه البيانات الماليه المجمعة , يوجد
نزاع قضائي مع بنك محلى لإسترجاع ملكية المجموعه في بنك كويتي مدرج ‏
في سوق الكويت للأوراق الماليه و مصنف ضمن الاستثمارات في شركات
زميله بقيمة دفتريه بلغت 142 مليون د.ك تقريبا في البيانات الماليه المجمعه ‏
و قد بلغت الوكالات الدائنه المتعلقه بذلك الاستثمار بالبيانات الماليه ‏
المجمعه 75 مليون د.ك تقريبا . لم نتمكن من الحصول على ادلة تدقيق كافيه ‏
و موثوق فيها لتحديد ما اذا كانت هناك اية تسويات قد تكون ضروريه على ‏

البيانات الماليه المجمعه نتيجة لذلك .‏

Boubyan Bank - Time to Sell?

So say Saud and Naser at AlphaDinar.

Some very interesting implications for 

1. TID, CBK and the creditors of TID
2. Existing shareholders with the upcoming Rights Offering

Boubyan Bank to Reopen Rights Offering

AlWatan reports that BB's shareholders will be asked to approve the reopening of its partially successful Rights Offering for the roughly 15% shares that weren't placed earlier.  This at an ordinary general shareholders meeting 29 April.  The subscription period will be 2 May through 9 May for shareholders of record as of 12 January 2010.

Earlier post here.

The Investment Dar Clears Another Hurdle in Its Restructuring

Citing a well connected but unnamed source, AlQabas reports that the Financial Stability Law Court has issued a decision halting all legal cases against TID.  As you'll recall the FSL procedure is that upon the receipt of a request from an investment company (accompanied by all necessary documents), the FSL Court issues a temporary stay and notifies creditors who have a limited time in which to submit their objections.  That step has come to an end with the Court upholding TID's entry under the FSL process.

So while as AlQabas headline says "TID Breathes a Sigh of Relief After the Freezing of Court Cases Against It".  The next step is for the Central Bank to study the proposed restructuring plan and report back to the Court on whether it supports it or not.

I think the CBK will approve the plan.  It's an important step in restoring financial stability to the country.  So if it has a reasonable chance of success, the CBK will probably approve.

As well, a decision by a Kuwaiti Court does not necessarily stay court actions in other jurisdictions unless those jurisdictions are convinced that the proceedings in Kuwait under the FSL are equivalent to their own bankruptcy/insolvency/restructuring regimes.  Again I think other jurisdictions will give Kuwait the benefit of the doubt.

AlQ notes one wrinkle and that is that ("Islamic") murabaha holders had conditioned their acceptance of the restructuring on their being given priority of payment over other creditors given the difference of their position versus other creditors.  Essentially that argument was that they had deposit or trust arrangements as discussed in an earlier post.

The article goes on to note that the recent travel disruptions in Europe had caused the postponement of Creditors Co-ordinating Committee meetings.  The CCC will meet on Monday and then with TID with on  Tuesday.  Venue Dubai.

Topics are the possibility and modality of the accommodation with Commercial Bank of Kuwait regarding the Boubyan Bank shares.  Creditors are reportedly concerned about two things.  First, that time is a factor.  A key concern is that if a fixed price contract is struck, BB shares may decline in value before implementation.  Then the parties interested in buying (note the use of the plural) will decide to pick up the shares in the market rather than pay above market.  Second, the creditors want to discuss getting their cut of the proceeds from any sale. 

Other topics are the role of the CCC in the period while the FSL process moves forward (CBK review, approval, etc). A process expected to take several months. And whether the Chief Restructuring Officer should be given additional duties for the implementation phase.

Previous posts can be accessed using the labels "The Investment Dar" and "Financial Stability Law".

Kuwait Court Delays Action in Boubyan Bank Case Against AlAbraj Holding

AlQabas reports that legal sources informed it that the Court decided on 20 April to postpone action in Boubyan's bankruptcy case against AlAbraj until 6 June.  This appears in part to be to allow the addition of a fifth defendant, an unnamed local bank, in the case.  The article also notes that Boubyan had filed a motion to compel other Kuwaiti banks to disclose any AlAbraj assets they held.  No doubt in an attempt to block these and eventually realize them.

Boubyan's attorney reportedly asked the Court to set the future hearing as soon as possible given the long and persistent delays so far. (Welcome to the GCC court system!).  On a closing note, AlQ comments that Boubyan's (separate) case against the Board of Directors for temporary compensation is scheduled for a hearing on 27 April.

National Bank of Kuwait Increases Stake in Boubyan Bank to 46.66%

NBK has increased its stake in BB to 46.66% as per the KSE.   (Very last item on the page).

Currently, NBK has Central Bank of Kuwait approval to acquire up to 60% of BB - which would mean that at present they could not buy all of Commercial Bank of Kuwait's 19.196% stake in Boubyan.  Though I suppose the Central Bank of Kuwait might be persuaded to allow them to buy more.

Commercial Bank of Kuwait - New Board The Godfather in Kuwait

An interesting post by Sal over at Alphadinar.    Why Dherar Al-Rabah was Appointed Chairman of Commercial Bank of Kuwait. 

Commercial Bank of Kuwait - Fireworks at Annual Shareholders' Meeting - Directors Not Released from Responsibility for Fiscal Year 2009

AlQabas has a report on CBK's Annual General Meeting of Shareholders ("AGM") 7 April.  (Also sometimes referred to as an Ordinary General Meeting to distinguish from an Extraordinary General Meeting.  The difference between the two arises from the entity's articles of association which set forth the powers of each.  For example, an amendment of the Articles generally requires an EGM).

Some 85.49% of shareholders were at the meeting which proceeded calmly until the 9th Agenda item - the release of the Board of Directors and the Managing Director from responsibility for their conduct during the last fiscal year (2009).  Generally, not a contentious issue.  Usually approved quickly.

This time was different.   As the AGM moved to Item #9, Ali Musa Al Musa, Chairman and Managing Director of Securities Group,  made two proposals.

1. To delay voting on releasing the old board and the previous Chairman/Managing Director, Dr. Abdul Majid AlShatty from responsibility for their conduct during fiscal year 2009 until a future AGM  (While these are generally scheduled once a year, there is no reason one couldn't be called sooner).  In the interim the new board would conduct a legal, management and accounting review of the conduct of the previous board and managing director to determine if they had taken any salary, benefit, compensation or other perk during 2009 and the period up to the date of the AGM (when they were still in control of the bank).
2. And that in line with sound corporate governance, the principles of disclosure, transparency etc the AGM vote that no member of the board or the managing director can receive any salary, benefit, compensation or other perk without the prior agreement of an AGM with full disclosures of the package. 

Mr. AlMusa's proposals passed with 79% of the vote.

There is a transcript of the exchange between Mr. AlShatti and Mr. AlMusa.  As you might expect, AlShatti took AlMusa's proposals as a personal attack.  So there is some interesting back and forth.  AlShatti saying that he and Jamal AlMutawa had taken at 15% salary cut noting that whatever the AGM said, or did not legally the Board was not released for its conduct until after 5 years.  He also noted that the board had served loyally for 12 years.  For his part AlMusa denied that he was accusing anyone, but fighting for fundamental principle of shareholders' rights.

Buried in the third paragraph from the end of the article is a statement that the Central Bank of Kuwait supposedly ruled that any profit from the sale of Boubyan Bank shares by CBK belongs to CBK's shareholders not the creditors of TID.   This is an important point to watch in view of the current market value of BB being roughly twice the amount of the repo between CBK and TID.

CBK's new board comprises Darar Al-Ribah as Chairman, Ali A-Awadi, Anud AlHatharan, Ahmad AlMishari, Badr AlAhmad, Tariq AlUthman, and Mahdi AlJazaaf.   

Note:  AlShatti had objected to the election of AlMishari saying he had not been cleared of his responsibility for 2009 and that it was nothing personal.   AlMishari apparently was a director in 2009 but resigned prior to the AGM.   In responseAlMishari said he had resigned for "lack of fit" with the board.

Alternate Directors (in case one of the above leaves the board) are Ali AlMusa, Abdul Rahman AlAli,  and Mohammad AlShatti.

Boubyan Bank - Legal Struggle Between Commercial Bank and TID

Two articles in AlQabas today on the latest developments.

To recap late in December 2008, TID and Commercial Bank of Kuwait engaged in a US$200 million repo transaction. involving TID's shares in Boubyan Bank.  TID sold the shares to CBK against US$200 million and was to buy them back in 2009.   TID failed to settle the buyback.  In May 2009 CBK declared tthat he shares were now theirs.  Later they were on the verge of selling them to National Bank of Kuwait for a price reported to be US$420 million when TID got a "restraining" order.

What's at stake here?

1. For CBK an apparent tidy profit.  Also putting aside the profit, it has to be concerned that if this transaction is unwound, it could become part of TID's restructuring.  Not a happy outcome.
2. For TID a loss of highly liquid asset with significant value.  You'll recall that KFH has sued CBK trying to overturn the "sale".  As a participant in TID's restructuring, KFH has a clear self interest in getting as many good assets into TID's estate as possible.
3. For NBK in either case a motivated seller (TID or CBK) and the chance to increase its stake in Boubyan to 60%.   And, as one of my Kuwaiti friends said the other day,  probably the quickest way to increase both prudent business conduct and good corporate governance in the Kuwaiti financial sector is for NBK to purchase a firm.

The first article says that TID announced that the Supreme Court Commercial Circuit refused to hear its appeal of the earlier judgment against TID over the sale of the shares of Boubyan Bank to Commercial Bank of Kuwait.   TID intends to appeal noting that the judgment against it was in the Court of First Instance.  Also it noted that it had succeeded in the past in getting a freeze order on the further disposition of the shares pending resolution of the larger case, though the shares are temporarily registered in the name of CBK.  Some 221,425,059 shares.  At yesterday's closing price of KD0.520 per share, the stake is worth roughly US$403 million.

The second article says that NBK is "open" to working out a solution to the struggle between the two parties.  Apparently, the Central Bank "Monitor" appointed at TID, Ayyad Thafiri (Dhafiri in Kuwaiti dialect) has been exploring a solution.  CBK is reported to say they don't want anything but their money.   NBK is an eager buyer.  Time will tell if this account is correct and if the parties can work out a settlement.

National Bank of Kuwait Gets Central Bank "OK" to Increase Stake in Boubyan to 60%

The National Bank of Kuwait announced on the KSE today that it had received Central Bank of Kuwait approval to increase its stake in Boubyan Bank to up to 60%.  Currently, NBK owns 39.99% of Boubyan.

The Central Bank of Kuwait's approval is for purchases during the period 22 March 2010 through 20 May 2010.

NBK has been pursuing a majority in BB for some time now.  Earlier it had tried to purchase the stake held by Commercial Bank of Kuwait of some 19.99% which CBK had acquired by taking the collateral posted by The Investment Dar for a defaulted repo.  If the lawsuits raised by TID and KFH have been resolved, then CBK may be the source of NBK's new shares.

Announcement from KSE (Arabic only) below.

[10:47:38]  ِ.(الوطني)يحصل على موافقةالبنك المركزي لشراء حصة بحد أقصى60% في بنك بوبيان
يعلن سوق الكويت للأوراق المالية أنه قد ورد إليه الأن من بنك الكويت الوطني
كتاب يفيد بأن بنك الكويت المركزي قد وافق على رغبة بنك الكويت الوطني في ‏
شراء حصة بحد أقصى 60% من رأس مال بنك بوبيان ، وان اجل سريان ‏
هذه الموافقة هو ثلاثة اشهر تبدا من تاريخ 22-03-2010 وتنتهي فى ‏
ِ20-05-2010 ، علما بان البنك يتملك حاليا نسبة 39,99% من اسهم بنك ‏
بوبيان .‏

Al-Abraj Holding Company Kuwait - Latest Developments in Bank Boubyan Lawsuit

AlQabas has a short item on the lawsuit by Boubyan Bank against AHC under the headline "Banks Request Delay in Bankruptcy Proceedings Against AlAbraj".

Two days ago the High Court - Commercial Section - adjourned its session until 20 April to study the case raised by Boubyan against AlAbraj Holding.   Legal sources are quoted by AlQ as saying that the delay was in response to a request from the Company itself as well as from three local (Kuwaitit) banks.  In its original complaint, BB asked that the Court freeze AHC's accounts with other banks and declare the Company bankrupt.  The banks want time to study BB's legal complaint as well as their records regarding AHC's account with them.

For those reading this post, there are at least three companies which use Towers (AlAbraj or Abraj) in their names.  AHC is a Kuwaiti company.

Earlier posts can be accessed using the label "AlAbraj Kuwait"

Boubyan Bank - Vice Chairman Resigns To Become Chairman of Warba Bank

Boubyan announced on the KSE today that its Vice Chairman Mr. Jasaar Dakheel AlJasaar had resigned as he had been elected Chairman of Warba Bank.  He submitted his resignation effective 23 February.  However, the Board decided to push the effective date to the coming ordinary general meeting of shareholders. Presumably to avoid having to nominate an interim Vice Chairman and appoint a new board member.  As posted earlier, there is anticipation that NBK will be inserting some of its "people" on the Board given its 40% shareholding.  Nominations for the board opened today (2 March) and extend to 16 March.

Text of press release (Arabic only) below.

[9:53:52]  ِ.استقالة نائب رئيس مجلس إدارة بنك بوبيان ‏
يعلن سوق الكويت للأوراق المالية بأن بنك بوبيان قد أفاده بأستقالة ‏
السيد / جسار دخيل الجسار ، وذلك نظراً لاختياره رئيساً لمجلس ‏
إدارة بنك وربة وأصبحت استقالته نافذه من تاريخ 23-2-2010 ‏
كما أفاد البنك بأن مجلس الإدارة الحالي قد تقدم بأستقالته التي ستصبح ‏
نافذه بتاريخ انعقاد الجمعية العمومية المقبل علما بأنه تم الإعلان عن فتح ‏
باب الترشيح لانتخابات مجلس الإدارة في الفترة من 2 إلى 16 مارس 2010 .‏

Boubyan Bank - Old Board to Resign New Board to Be Elected

 

AlQabas quotes informed sources that the Board of BB has informed the Central Bank and major shareholders that it intends to resign so that a new board can be elected.  Presumably this accords with the wishes of the new shareholders.  The article goes on to praise the old board for taking decisive steps to strengthen the bank, e.g., the decision to take KD66.9 million in provisions and raising additional capital.

The AlQ article says that of the nine member board, 5 new members will be elected and 4 from the old board re-elected.

I guessing the National Bank of Kuwait wants to tighten its grip.  A rather large chunk of capital was provision away for 2009 and that's definitely not the sort of results NBK is known for.