TID makes optional and voluntary Settlement-in-Kind offer

07 May 2014

The Investment Dar K.S.C.C. (‘TID’ or ‘Company’) confirmed that on Wednesday 7th May it had met with its banks and investors (‘Creditors’) at an all-Creditor meeting in Dubai to present a settlement-in-kind offer for their consideration. The settlement-in-kind offer is completely optional and voluntary and will be open to all Creditors; for those Creditors who do not opt to take the settlement-in-kind they will retain their claims under the restructuring plan approved by the Special Circuit Court of Appeal on 2nd June 2011. TID recently brought in the investment banking firm Houlihan Lokey to consult with its Investor Liaison Committee (‘ILC’), with the objective of crafting a settlement-in-kind offer that would balance the interests of all stakeholders. The ILC, which comprises six of the Company’s Kuwaiti and regional Creditors, met with Houlihan Lokey, representatives of TID management and the Monitor of the Central Bank of Kuwait to give feedback and guidance in working out the details of the final settlement-in-kind proposal which was made to the all-Creditor meeting on 7th May.

After the all-Creditor meeting, Abdullah Al-Homaidhi, the Company’s CEO, who chaired the proceedings, commented “There are three main drivers behind the voluntary settlement-in-kind offer. The first is ‘realism’ – TID’s management had anticipated that one of the Company’s major assets would already have been returned to it via the Kuwaiti Court system, the shares sold and the sale proceeds used to pay Creditors; this has not happened as quickly as we wanted – it is a fact which we have to deal with. The second driver is ‘transparency’ – the feedback from our ILC is that the Creditors will feel more comfortable with more information on TID’s investments and, if the settlement-in-kind achieves a good level of acceptance the Creditors will have significant input on how the Company’s assets are managed and sold. The third driver behind the proposal is ‘fairness’”, Al-Homaidhi added, “Under the structure of the proposal, all Creditors – whether or not they accept the settlement-in-kind offer - will have an equal opportunity to share in the sale proceeds of future TID asset sales. This equal treatment of Creditors is a key element of the restructuring plan approved on June 2nd 2011 under the Financial Stability Law”.