Investment Dar Co., a shareholder in luxury British carmaker Aston Martin, is asking creditors to take a 50 percent writedown on the Kuwaiti company’s debt as it seeks to meet repayments after defaulting on a loan three years ago, according to three people familiar with the matter.
Under the optional plan, creditors will receive a cash payment totaling 5.7 percent of their outstanding debt and a portion of a new Islamic loan equal to about 44 percent of their current exposure, the people said, asking not to be identified as details aren’t public. Investment Dar’s stake in Aston Martin and real estate holdings will be among assets backing the new credit facility, according to the people.
Investment Dar, which defaulted on a $100 million Islamic bond in 2009, restructured about $5 billion of debt in 2011 after the global credit crisis reduced the ability of some Kuwaiti companies to repay loans. The firm, which has a 50 million Kuwaiti dinar ($176 million) repayment due on June 30, said its proposed settlement-in-kind plan, announced last month, “tremendously enhances” its ability to repay debt on time.
Creditors have until today to accept the deal, the people said. The company has received substantial commitments for the settlement, which also envisages an equity stake for creditors in a new company being created to hold the assets, according to one of the people. Creditors who decide not to take the offer will retain their claims under the restructuring plan approved by a Kuwaiti court, the company said last month.
Under the plan, the assets backing the new facility will be sold in about four to seven years, one of the people said. Creditors will have first lien on these assets, the person said, meaning that if Investment Dar defaults, creditors signed up to the plan will be paid before all other debt holders.
Investment Dar was part of the group that bought Aston Martin for 503 million pounds in 2007. Calls and e-mails to Investment Dar in Kuwait and London weren’t returned.
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.
Investment Dar in March said it agreed to sell its 51.6 percent stake in loss-making Bahrain Islamic Bank to National Bank of Bahrain and a state-run Social Insurance Organisation.
Kuwait’s economy may grow as much as 5 percent this year, Finance Minister Mustafa Al-Shimali said in April.
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.
Investindustrial has a track record of turning around high-end vehicle manufacturers, selling Italian motorcycle maker Ducati to VW’s Audi last year. Investindustrial plans to remain an Aston Martin shareholder for at least 10 years, Bonomi said.