News

Kuwait firms demand $1.12bn government fund

By Reuters Published: 2008-10-19T20:00:00+04:00

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Kuwaiti investment firms are urging the government to set up a $1.12 billion fund to help them settle their debt, in the wake of the global financial crisis, a newspaper said on Monday.

Investment companies have asked Finance Minister Mustapha al-Shamali and the Managing Director of the Kuwait Investment Authority (KIA) Bader Al Saad on Sunday to set up a portfolio or a fund worth 300 million dinars to help pay back part of their debt, daily Al Watan said in an unsourced report.

The fund is a first stage to enable the firms to meet their financial obligations in the coming three months as a result of a total loan debt worth about 3.2 billion dinars from foreign banks, Al Watan said.

The firms suggested that the fund is to be managed by the KIA or the state-owned Industrial Bank of Kuwait and that stock or real estate owned by the companies could be used as collateral, said the paper.

The fund could be funded by the KIA, the country's sovereign wealth fund, which manages its oil-generated assets, as well as Kuwait Petroleum Corp (KPC) and the Public Authority for Social Insurance, the paper said.

KIA could not immediately be reached for comment.

On Saturday, the central bank governor Sheikh Salem Abdul-Aziz Al Sabah said that, though local banks were performing better than expected in the current global situation, investment companies could be hit negatively by the crisis.