Global Investment House
| Private | |
| Founded | 1998 |
| Headquarters | Kuwait |
Key people |
Hisham Al-otaibi (Chairman) Mana K. Al-Ghunaim (Vice Chairman & Group CEO) Bader Al Sumait (CEO) |
| Website | http://www.globalinv.net |
Global Investment House (Global) is an investment company incorporated in 1998, and falls under the regulation of the Capital Markets Authority of Kuwait. In late 2008 and early 2009 Global was hit by cash flow problems affecting its operations in several countries. Kuwait's Global Investment House 2010 loss $260 million.[1]
Today, Global is an unlisted shareholding company, however the stock used to be listed on the Kuwait Stock Exchange (delisted as of 19 June 2013) and on the Bahrain Stock Exchange, with branches and affiliates in Bahrain, Dubai and Abu Dhabi (UAE), Jordan, Qatar, Turkey and Saudi Arabia.
They immediately reduced their workforce by 30% in Feb 2009 after defaulting their loan payments.
Media and Industry Reports
Global’s assets under management as of December 2014 were KD 1.188 billion (USD 3.6 billion).[2]
For the third consecutive year, Euromoney magazine awarded Global this year’s Award for Excellence as the “Best Investment Bank in Kuwait 2007”. In 2008 Global introduced several new funds during year among them are Asia Real Estate Fund, a Shari’a compliant fund, the Palestine Dedicated Fund, the first of its kind in the region.
The Company still struggles with mark-to-market losses due to its proprietary investments although these have been ring fenced in a Bahrain-based Fund with the assets pledged to the creditors and are slowly being divested. The value of these assets are independently valued on a regular basis however the assets are long term investments that need time to mature before they can be sold. The ongoing litigation with The National Bank of Umm Al Qaiwain remains outstanding with a potential amount of about US$ 300mm being recoverable. The ongoing litigation remains outstanding as of July 2012 (with the decision once again being the subject of an appeal) with the firm (and the creditors) desperately holding onto the hope of one day receiving these monies. Fee-generative business lines continue to suffer both in terms of the general ongoing financial crisis and in terms of a general under performance of the Kuwait market. The lack of Government support for the Financial Sector as a whole has hurt the fledgling Investment Banking industry within Kuwait (see Investment Dar) and this stance is not likely to change in the near term. Recent events (as on July 2012) have seen the presence of the company in Bahrain cut in half (both in terms of floor space and staff).
Recent media reports have confirmed reductions in staff headcount but in overall terms the costs savings will be minimal when compared to the outstanding liabilities due to creditors. As of July 2012 the firm continues to reduce staff but steadfastly refuses to entertain the idea of relocating from its existing premises which are now more than 1/2 empty.
Default
On 22 December 2008, following Standard and Poor's downgrade of their debt to "speculative default" from investment grade a week before,it was reported that the company defaulted on $200 million in loans, and that HSBC had been appointed to deal with renegotiating this and other debts.[3]
Despite the default, Global, reflecting the relative strength of its position, has continued to pay all interest on outstanding debt obligations (no longer the case as of 2012)which many similar companies in the region have not done. Global is in the process of restructuring to reflect this new operating environment and create a more robust business going forward. As previously announced a debt rescheduling process is underway. The Principal Investments and Real Estate assets are being ring fenced away from the core business and will eventually be sold to facilitate the debt rescheduling and deleveraging of the company.
The business is being refocused on the fee driven Asset Management, Investment Banking and Brokerage businesses to leverage off the inherent stability of cash flows from asset management clients and USD 3.6 billion assets under management ("AUM"). Through this restructuring process Global's management believe that the company will emerge as a more streamlined, fee driven business well positioned to take advantage of a recovery in their focus geographies, particularly the GCC and wider MENA regions.
As of December 2011 the firm announced via its website that "it has obtained the requisite consent from its lending banks and bondholders, subject to certain terms and conditions, to defer certain mandatory minimum principal payments to 10 June 2012, defer any increase in margin to 10 June 2012 and defer /waive certain covenants applicable to Global under its lending arrangements to 10 June 2012".