The international arm of Kuwait’s state oil company said yesterday it had signed a $ 750 million, five-year syndicated loan which it will use to increase liquidity and support its global operations. Kuwait Foreign Petroleum Exploration Company (Kufpec) said five banks – Bank of Tokyo-Mitsubishi, HSBC, JP Morgan Chase, National Bank of Kuwait and Royal Bank of Scotland – had arranged the loan, according to a statement cited by state news agency KUNA.
No other details about the facility were provided. Kufpec is active in exploration, development and production of crude oil and natural gas in Africa, Middle East, Asia and Australia. It is planning to increase production capacity to 200,000 barrels of oil equivalent per day and boost its reserves to 650 million barrels by 2020, the KUNA statement said. OPEC member Kuwait produces around 3 million barrels of oil per day. It wants to increase that to 4 million by 2020. Kufpec began marketing the loan in April, offering to pay 140 basis points over the London interbank offered rate (Libor).
In another development, Kuwait’s Global Investment House said yesterday that it had completed a $ 1.7 billion restructuring plan, the second at the firm since the global financial crisis. Under the plan, Global separated its core fee business from other parts of the company which were spun off into special purpose vehicles (SPV). Global was one of several Kuwaiti investment firms hit hard by the crisis. It used short-term debt to invest heavily in local real estate and stocks whose values later slumped. Global created two SPVs under the plan. One holds company assets, along with debt, worth $ 1.3 billion.
The other took part in a capital increase for the parent company, in which Global offered 122.2 million Kuwaiti dinars ($ 429 million) of new shares to creditors, leaving them owning 70 percent of the investment firm. Shares in Global, which were delisted from Kuwait’s stock exchange in June, had not traded in Kuwait since December 2011, when the bourse suspended the stock after the company accumulated losses exceeding 75 percent of its capital.
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