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  • Global obtains shareholders approval to transfer designated principal investments and investment properties to wholly owned subsidiaries
    Posted: Tuesday, January 12, 2010

    يرجى الضغط هنا لقراءة النسخة العربية من البيان الصحفي

    Global held its Ordinary General Meeting (“OGM”) to obtain shareholders approval to transfer its principal investment assets and real estate investment properties to the Global Macro Fund (a closed, unit based fund) and a Real Estate Holdco respectively.   Both the Global Macro Fund and the Real Estate Holdco are wholly owned (directly and indirectly) subsidiaries of Global .   The shareholders’ approval was also sought to pledge the above-mentioned principal investment assets and real estate investment properties in favour of the Company’s financiers in accordance with the terms of the Company’s Debt Restructuring Agreements.  The shareholders granted their approval to all items of the ordinary general meeting agenda.

    Background
    As part of the restructuring of Global's financial indebtedness, a level of security has been offered to the creditors over the Global Macro Fund, which contains Global's Principal Investment assets, and Real Estate Holdco, which contains investment properties.  There is no security offered over Global Investment House KSCC, its core businesses and related assets, namely; the Asset Management, Investment Banking and Brokerage businesses.

    The Kuwait Stock Exchange has granted Global a special approval to transfer securities listed on the Kuwait Stock Exchange and owned by Global, through Over-The-Counter procedures to the Global Macro Fund and/or Global MENA Macro Fund Company (the Fundco of Global Macro Fund).  This approval will save Global time and costs associated with transferring listed securities through regular market trades. Such special approval was subject to Global obtaining the approval of its shareholders.

    Both the Global Macro Fund and Real Estate Holdco are 100% owned (directly and indirectly) subsidiaries of Global.  The Global Macro Fund remains a source of fee based cash inflows for Global's core business.

    The security offered is only triggered upon an Event of Default, the main triggers for which are non-compliance with mandatory minimum repayments or non compliance with agreed covenants.

    Key aspects
    • Global is transferring USD1.44bn of principal investments to a wholly owned Global Macro Fund at valuations performed by an independent valuer. 
    • 100% of the units of the Global Macro Fund will be owned by a wholly owned (both directly and indirectly) subsidiary of Global.
    • Global is transferring USD295.1 million of real estate assets (investment properties) to Mushaaa Islamic Real Estate Company (the Real Estate Holdco), which is a wholly owned subsidiary (directly and indirectly) of Global at valuations performed by independent valuer.
    • In substance, Global retains all the risks and rewards of the assets transferred to Global Macro Fund and Real Estate Holdco.   Therefore, the International Financial Reporting Standards criteria for de-recognition of assets is not met and the performance of the principal investment and real estate portfolio will continue to impact Global's financial results.  In this context the valuation basis for the transfer of assets is purely a reference point and has no impact on the financial results or financial position of Global.
    • Core assets, namely majority stakes in brokerages, asset management business and strategic stakes in overseas operations remain un-encumbered.