Kuwait Finance House Rejects Investment Dar’s Debt-For-Assets Plan

Kuwait Finance House (KFH), the Gulf state’s largest sharia-compliant bank by assets, said it had rejected a debt-for-assets deal proposed to creditors by Investment Dar, another Kuwaiti sharia-compliant lender.

In a statement on Wednesday, KFH said it would take all legal measures available against Investment Dar to try to collect the debt it was owed. It didn’t specify a monetary sum.

After overextending itself during the boom years of the mid-2000s, Investment Dar has been seeking to cut its debts in the wake of the global financial crisis.

It outlined its latest debt restructuring proposal to creditors ahead of a meeting with them on Jan. 21. Investment Dar, best-known for its stake in luxury carmaker Aston Martin, said on Nov. 18 that it had received the backing of a “significant majority of investors” for the proposal, which would see creditors voluntarily exchanging debt for ownership of a portfolio of assets.

The proposal, first made last May but amended with new terms in June, is an alternative to a KD1 billion ($3.38 billion) debt restructuring plan agreed in 2011.