KUWAIT CITY (AFP) – Global Investment House, a leading Kuwaiti investment firm, said on Sunday it made its first ever loss last year due to the global financial crisis.
The 257.4 million dinars (881 million dollars) loss compares with a profit of 312 million dollars in 2007, Global said in a statement.
The price of the company’s shares, which have been suspended from trading since March 31, had slumped 67 percent so far this year after plummetting 79 percent in 2008.
Its market capitalisation stands at just 288 million dollars, down from 4.1 billion dollars at the end of 2007.
“2008 was a year of unprecedented global market turbulence. Global has not been immune to this and we unfortunately reported our first ever loss in 2008,” said Maha Al-Ghunaim, chairperson and managing director of Global.
“This has been caused, in a large part, by unrealized losses on our investments and as a result we are renewing our focus on fee generated income, which has always been profitable,” she added.
In December, Global said it defaulted on the majority of its debts and appointed HSBC Bank as financial adviser to renegotiate the existing credit facilities’ terms with the lending bank group.
The company has continued to meet all its debt service payments as they fall due, it added.
The firm has reduced costs by more than 20 percent through decreasing its workforce by 10 percent, scaling back salaries and cancelling all 2008 related bonus payments, it said.
Global has been one of Kuwait’s fastest expanding investment firms in the past few years, taking substantial loans in the process.
The company ratings have been downgraded by some international rating agencies, and others placed it on their watch lists for a possible downgrade.
Investment companies in Kuwait have been facing difficulties repaying their debt with the tightening of credit opportunities due to the global financial crisis.
The 99 companies under the supervision of the central bank of Kuwait have a total debt of around 18 billion dollars, including eight billion dollars owed to foreign lenders.