The Investment Dar Sukuk Company said in a statement posted on the Bahrain Stock Exchange that an event of default had occured in the payment of the periodic distribution amount to Sukuk certificate holders.
The payment was due on April 27 and the "default has continued unremedied for a period of 14 days," said the Sukuk Company, adding that this constitutes a "dissolution event." The sukuk issue itself matures in 2010.
Like many Kuwaiti investment firms, Investment Dar, which in March 2007 bought 50 per cent of the British Aston Martin luxury car company, has been hit hard by the global economic downturn.
It became the first Islamic Gulf company and the second leading investment firm in oil-rich Kuwait to announce a default on debt repayment after Global Investment House made a similar announcement in Decemeber.
The two companies owe close to 40 per cent of the estimated $17 billion debt on 99 Kuwaiti investment firms, just under half of it for foreign banks. They are particularly troubled by short-term debt which matures this year and next.
Dar and Global have been negotiating with debtors restructuring plans that could give them fresh loans to refinance debt repayment or reschedule payments.
At least one Kuwaiti debtor, Nour Investment, has taken Dar to court demanding the repayment of an unspecified loan. The next hearing of the case is set for June.
Dar's stocks have been suspended from trading on the Kuwait Stock Exchange since April 1 for failure to announce its 2008 financial results. Global posted a loss of $881 million, its first loss ever.
Kuwait last month issued a multi-billion-dollar stimulus bill to help banks and investment firms.
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