Global Investment House ("Global" or the “Company”) announced today its results for the nine months ended 30 September 2009.
Key points of the results:
Results comprise net operating income from fee-based businesses (asset management, investment banking and brokerage) impacted by losses on investments and losses from share of results of associates resulting in an overall loss
Global reported a profit of KD12.2 million from asset management and brokerage lines of business and an overall net loss for the nine months of KD104.2 million (KD0.085 loss per share); Q3 2009 overall net loss reduced by 81% to KD5.6 million compared to Q2 2009 net loss. The loss is mainly attributable to:
• Realised and unrealised losses and impairment from principal investments and real estate of KD41.7 million
• Losses from share of results of associates of KD29.9 million
Fee, interest and dividend income contributed KD25.9 million to the operating income during nine months of 2009.
Despite the reported net loss in nine months ended 30 September 2009 Global’s total assets amounted to KD981.4 million and net assets of KD206.8 million.
Total AUM as at 30 September 2009 amounted to KD1,897.9 million. Our asset management business remained resilient with several of the funds outperforming their respective performance benchmarks. Global MENA Ijarah Real Estate Fund rewarded its unit holders with a 6.5% cash dividend for the second quarter of 2009. This was the Fund’s third distribution since its final closing in September 2008. Global Buyout Fund distributed 3% cash dividend whereas Global Opportunistic Fund I distributed 4.4% to its investors. Global was ranked as 20th Private Equity firm in Asia and 126th Private Equity firm in the world by Private Equity Asia and Private Equity International respectively.
Cost cutting measures
• Global continues to work towards reducing its operating cost base. Nine months 2009 personnel expenses of KD7.4 million were 49% lower than the comparable period of 2008. Other operating costs of KD14.0 million were however higher than 2008 on account of one-off costs associated with the restructuring process and increases in costs arising from acquisitions made in later part 2008.
Debt default and progress on restructuring process
• Global has continued to meet all its debt service payments as they fall due and remains confident that by working cooperatively with its stakeholders, a sustainable, long-term financing solution for the Company is likely to be achieved in the near future.
• Following the approval by the overwhelming majority of Global’s creditors to the proposed terms of the restructuring, Global held meetings with its bank creditors in Dubai and London on 19th and 20th October at which a timeline for completion of the restructuring was proposed.
The size of total bank debt to be restructured is expected to be KD500 million (USD1.75 billion). The outstanding bonds of KD89.5 million (USD312 million) are expected to be paid as per their scheduled maturities.
Maha Al-Ghunaim, Chairperson of Global commented:
“We are delighted by the overwhelming support creditors have shown Global through these challenging times and are excited by the prospect of putting this episode behind us and moving forward and allowing the management team to focus on the core business opportunities within the MENA region. “
David Pepper from WestLB and Chair of the Banks’ Steering Committee, added:
“We are delighted and encouraged by the significant progress to date made by Global and its advisers, HSBC. Global has been highly professional and transparent throughout this process setting precedents for other restructurings in the region. We very much look forward to working with Global and HSBC towards a successful completion of the restructuring and are optimistic that it can be achieved in accordance with the timetable outlined during the bank meetings.”
Commenting on the results, Maha Al-Ghunaim, Chairperson and Managing Director of Global, said: “I am pleased with the narrowing of the losses quarter-on-quarter and robust performance of our asset management business, that continued to generate recurring cash flows and enjoyed the confidence and faith of our clients. We have invested the past few months not only in working towards a successful completion of restructuring, but strengthening fee generating lines of business, namely asset management, investment banking and brokerage; in revamping the risk management and compliance function; reducing our existing and contingent liabilities; successfully defending the company’s legal position in various litigations, and most importantly understanding the needs of our clients. I am convinced that we are up to the challenge and will emerge from this period of market dislocation as a stronger Company, able to serve our clients even more effectively.”
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