GBL INVMT GDR'S' : Global Announces its Nine Months Financial Results

Global today announced its financial results for the nine months ended 30 September 2011.

Key points of the results:

- Fee-based businesses (asset management, investment banking and brokerage) generated operating income amounting to KWD11.6 million

- Global made a USD54.4 million principal repayment of its bank debt - Overall net loss of KWD54.2 million (KWD0.044 per share)

Focus on Global's fee-based business
During 9M 2011, the Asset Management business remained resilient with KD1.1bn of assets under management. Several funds managed by Global outperformed their respective indices and peers. Standard and Poor's Fund Services assigned an "A" rating to Global Saudi Equity Fund. Global was named Kuwait Asset Manager of the year by MENA Fund Manager (MENA FM), one of the leading organizations that monitor the regional asset management industry. Global Buyout Fund received "Best Private Equity Fund" by The Banker Middle East during the nine months period.

Principal Investments
During the nine months ended 30 September 2011, the Principal Investments losses stood at KWD31.5 million. This is mainly attributable to fair valuation adjustments stemming from continued weakness in the GCC and MENA equity markets where most of Global's principal investments are located and also due to the cost of funding associated with the principal investments portfolio.

Cost base
Global continues its drive to rationalize its cost base. Other operating expenses in 9M 2011 were 26% lower than the 9M 2010. During 9M 2011, interest costs reduced by 3% to KWD17.9 million compared to 9M 2010 interest cost of KWD 18.4 million stemming from reduced levels of debt from KWD554.8 million at 30 September 2010 to KWD496.3 million at 30 September 2011, a 11% reduction.

Debt repayment
During 9M 2011 Global made USD54.4 million principal repayments, bringing the total repayments since inception under the restructured bank debt to USD232.8 million (13.2% of the original principal amount). Global met with its lending banks to discuss the Company's recent financial performance and outlook on 15 September 2011. In light of the ongoing challenges in the financial markets, various potential alternatives to enhance Global's balance sheet were reviewed. To facilitate a more in-depth examination of such alternatives in collaboration with Global, the lending banks appointed certain of their members to a working group.

In addition, Global requested the lending banks' support for the near-term deferral of principal repayments due in December 2011, deferral of any increase in rate of interest from December 2011 onwards and waiver/deferral of certain covenants applicable to Global under its debt arrangements. These modifications are designed to facilitate discussions between Global and its lending banks about a more comprehensive restructuring of Global's debt obligations. A formal request for these waivers was circulated to the lending banks on 3 November 2011. Under the credit facilities agreement the bondholders' consent will be sought to endorse and approve the relevant waivers sought from the lending banks in a meeting scheduled for 5 December 2011. Also, in case of KD45 million bonds due on 25 April 2012, a waiver will be sought to defer the principal maturity to 10 June 2012. It is worth noting that Global has continued to service all of its outstanding debt to date in accordance with its terms.