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

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

KFH said it would take all legal measures available against Investment Dar to try to collect the debt it was owed.

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.

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