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Kuwait's Global reaches seized Jordan deposits deal

KUWAIT - Kuwait's Global Investment House said on Thursday it had reached an agreement with Jordan's Housing Bank for Trade and Finance to release bank deposits seized by a court over a loan dispute.

Global, Kuwait's biggest investment bank, said earlier a Jordanian court had halted the operations of its Global Jordan unit and seized its deposits in local banks after a dispute over a loan from Housing Bank.

A Global spokesman said the firm had reached an agreement with the bank to release the deposits in return for unspecified collateral, clarifying earlier statements which had referred to assets.

The dispute arose after Housing Bank said it was no longer willing to accept Global Investment as the guarantor of a loan it had extended to Global Jordan, the spokesman said, without giving the size of the loan.

Kuwait's Global said last month it had defaulted on most of its debts as investment firms in the oil producer suffer from a global credit crisis that prompted Kuwait's government to introduce a $5-billion rescue plan this month.

Shares of Global, which have slumped more than 50 percent this year, tumbled 5.43 percent on Thursday.

Global has said it is seeking $1 billion in loans to help refinance its debt. It has appointed HSBC and CBK Capital to hold talks with its creditors.

At the end of 2008, Global had total liabilities of $3.1 billion after defaulting on a $200-million loan in mid-December, Executive Vice-president Bader al-Sumait told Al Arabiya television this week.

The size of Global's portfolio in Jordan was about $900 million in September.

Kuwait's government has approved a $5.1 billion stimulus package, which parliament is expected to discuss on March 3.

Several investment firms have been struggling to refinance debts because banks are reluctant to extend loans.