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Kuwait firm bags $14b US deal

KUWAIT — Kuwait’s Public Warehousing Co. won its second giant contract this year by securing a US Defense Logistics Agency deal worth as much as $14 billion over up to 5 years, the bourse said yesterday.

The Kuwait Stock Exchange said in a statement that the deal has a minimum value of $1.4 billion and a maximum value of $4.2 billion during an initial 18-month period.

The news of the deal helped the Kuwaiti bourse, the second largest in the Arab world, log a gain of 3.5 per cent by late morning.

Under the contract, Public Warehousing will supply and provide logistical services to US and allied armed forces in Kuwait, Iraq, Jordan and Turkey, the bourse added.

Public Warehousing will also provide support to a UK-based logistics firm which has won the US defence tender to supply the Afghanistan region.

The Kuwaiti bourse said the tender agreement will be signed officially at a later date.

The initial PWC contract can be extended to two back-to-back 12-month periods followed by a final 18 months, with the minimum and maximum values during each 12-month period set at $933.7 million and $2.8 billion, respectively.

Shares in Public Warehousing rose 100 fils, or 2.96 per cent, at 3.480 dinars on the Kuwait bourse where the main share index of more than 140 stocks surged 304.40 points, or 3.63 per cent, to 8,686.90.

Public Warehousing and a group of affiliated firms had led the market advance since the company won a $3.27 billion Pentagon deal in mid-February for “subsistence items” for US armed forces. PWC shares peaked at $6.850 dinars on April 18 amid rampant speculation the firm would secure more contracts but fell sharply in the weeks that followed as many investors were disappointed no new deals had been announced.

The share losses were also compounded by the company’s distribution of bonus shares as a dividend.

Shares in Bayan Investment Co, which holds a big stake in Public Warehousing, jumped 100 fils, or 9.62 per cent, at 1.140 dinars, putting it at No. 2 on the per centage gainers list. Supermarket chain Sultan Centre Food, which is owned by Public Warehousing, added 100 fils at 1.680 dinars, or 6.33 per cent.