Investment Dar Co. will reduce borrowings after creditors holding 30 percent of its debt signed up to a new loan deal backed by assets including luxury carmaker Aston Martin, according to two people familiar with the matter.
The lenders to the Kuwaiti company agreed to a cash payment totaling 5.7 percent of their debt and a portion of a new Islamic loan equal to about 44 percent, the people said, asking not to be named because the details aren’t public. While the new deal represents a writedown of 50 percent it gives creditors more security over the assets, according to one of the people.
Investment Dar defaulted on a $100 million Islamic bond in 2009, triggering a restructuring of around $5 billion of debt, after the global credit crisis reduced the ability of some Kuwaiti companies to repay loans. A 50 million Kuwaiti dinar ($176 million) repayment that was due on June 30 is currently being processed, one of the people said.
The new voluntary settlement deal, offered to creditors in May, removes them from Investment Dar’s court-approved restructuring plan and gives them debt from a Jersey-registered company which will control the assets. Nine assets will back the new facility, with Investment Dar’s 34 percent stake in Aston Martin the most significant, according to one of the people.
Creditors not taking the offer retain their claims under the approved restructuring plan, the company said in May. Lenders who have taken the settlement will become 15 percent shareholders in the company holding the assets, while the new $437 million Islamic loan will be repaid through unscheduled asset sales and has a tenor of up to seven years, one of the people said.
A spokesman for Investment Dar declined to comment. The Kuwaiti company was part of the group that bought Aston Martin for 503 million pounds in 2007.
Investindustrial, a European private-equity fund, bought a 37.5 percent stake in Aston Martin in December through a capital increase for 190 million euros ($254 million). The agreement implied an enterprise value for the company of 940 million euros, the companies said at the time.
Aston Martin, which makes sports cars featured in James Bond movies, has held talks with potential partners to jointly develop high-end engines and electronic parts, Investindustrial Chairman Andrea Bonomi told reporters in Milan in January.
The carmaker intends to invest 500 million pounds ($784 million) over the next four years to develop the brand, he said.