Creditors say they cannot agree to revised restructuring plan
Creditors to Kuwait’s The Investment Dar (TID) have said they are unlikely to be able to agree to a revised restructuring plan drawn up by the company in early October.
In a letter sent to TID and the Central Bank of Kuwait, the coordinating committee, which is representing creditors in the restructuring process, said it is unlikely to be able to support the revised restructuring plan.
TID defaulted on a $100m sukuk in May 2009, and had $3.6bn of debt outstanding at the end of September 2008. The default sparked a restructuring of the company’s debts. A restructuring plan had been agreed by TID and the majority of creditors, but this was not compliant with new central bank regulations issued in June 2010.
The central bank asked for a revised plan to be submitted by 5 October. TID submitted a plan on time, but the coordinating committee complained that it had not seen the proposal before it was given to the central bank.
The coordinating committee has also submitted a new proposal to TID, although its response to the plan is unclear. That proposal involved swapping creditors debts to an interest in a new fund. The TID proposal involves an exchange of debt into another debt instrument that, according to the coordinating committee, involves the writeoff of a significant portion of their claim.
A source close to TID confirms that a new restructuring plan has been submitted to the central bank, but would not comment on the response from creditors.
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