The Investment Dar Statement

28 November 2010

The Investment Dar Company Board of Directors met on the morning of Thursday 25th November 2010 to discuss the resignation notice of the Coordinating Committee, representing TID’s banks and investors. Following the Board meeting, the Board would like to issue the following statement:

The Board received a letter from the Coordinating Committee, which was subsequently shared with the press, in which the Coordinating Committee announced its intention to tender its resignation if the TID Board did not issue a written commitment by the close of business on 28th November 2010 to immediately begin negotiations on an alternative Debt for Equity proposal and issue invitations to shareholders to attend an OGM to discuss this alternative plan. The letter also included a direct threat to the Board of Directors should they fail to approve the Coordinating Committee’s proposed alternative restructuring plan which includes dismissing 90% of the Company for less than half of the debts.

The Board considers sharing this letter with the press, before allowing the Board of Directors an opportunity to discuss this, an attempt to destroy any chance of a consensual restructuring agreement.

With this statement, TID would like to clarify that the Company and the Coordinating Committee have worked constructively together over the last 16 months to reach agreement on a consensual restructuring plan which was submitted to the Special Circuit Court which is specialized in the restructuring Investment companies. TID also noticed a substantial and serious turnover in the position the Coordinating Committee, lead by some of its members, after the Court assigned the Central Bank of Kuwait to review the plan which was approved by all members of the Coordinating Committee and over 80% of the banks and investors.

The change of the Coordinating Committee’s commitment was concurrent with the CBK order to the consulting firm, appointed to review the plan, to ensure that the plan met the CBK’s new regulatory ratio requirements released on 10th June 2010. This action was in violation of law 74 of the CBK, as the order was released after the consultation committee started their work on the review.

During this period, the Coordinating Committee offered to exchange 97% of shareholder equity for only KD575 million TID’s debt, equivalent to half TID’s total outstanding commitments. This offer was subsequently amended to exchange 90% of TID’s shareholder equity for KD475 million of TID’s debt, less than half the Company’s total debt. (At the time of this offer, all experts agreed that the value of the Company’s assets was in excess of multiples of the value of this offer on the medium term.!!!)

It is clear that such an offer was not intended as an attempt to reach agreement over the restructuring of the Company’s debts, but was a deliberate attempt to ensure the breakdown in negotiations between the Company and its banks and investors, with the aim of destroying the Company through the loss of shareholders rights in favor of the banks and investors. The Board is unable to take a decision to exchange 90% of shareholder capital and the decision to do so, could only be taken by shareholders at an OGM/EGM. The decision to accede to the Coordinating Committee’s proposal would result in the existing shareholders owning only 10% of the Company in exchange for a KD475 million reduction in the Company’s debt, less than half the Company’s total debt, leaving outstanding debts of KD600 million. The objective of this abusive and unachievable offer is obviously geared towards breaking up the negotiations between the company and its banks and investors which leads to destruction of the Company and its existing thousands of shareholders whose money will disappear with this offer.

Despite two years of financial turmoil as a result of the conditions brought about by the global financial crisis, the Company continues to hold solid assets, and the Coordinating Committee and those who work behind them, are consumed by greed and the desire to take over the Company’s assets.

The CBK requested the banks and the investors in Kuwait, who are also members of the committee, to build up provisions against TID outstanding debt, before the change in relationship and commitment between TID and the Coordinating Committee, and the request was synchronized with the agreement made between the Company and the banks and investors over the restructuring plan which was submitted to the Court.

The Board sees this as an indication that the fall of Company will not affect the national economy. This is not the case and fails to take into account the extent and complexity of the ongoing financial crisis.

The Company would like to assure all parties that it remains fully committed to a fair consensual restructuring plan with the banks and investors and aims to provide full repayment to the banks and investors whilst continuing to develop the Company’s assets to generate value for the shareholders. These principals have been agreed by all parties on a number of occasions.

Finally, we ask Allah for success and fairness and appeal to H.H the Amir of Kuwait and the fair Kuwaiti Justice.
The Board of Directors
The Investment Dar