IIG Funding: Bankruptcy petition dismissed, restructuring progresses

By Caroline Salls

Pittsburgh, May 31 - IIG Funding Ltd. said the bankruptcy petition brought against the company by creditor Hussein Ali Al Kharafi has been dismissed by the Kuwaiti courts of first instance, according to a news release.

While the judgment may be subject to appeal, the company said the dismissal of the petition may expedite the restructuring process.

IIG said it has made substantial progress on its operational and financial restructuring.

At an operational level, the company said substantial measures have been taken to streamline operations and reduce operating costs, including relocation to smaller premises and a significant reduction in the employee headcount.

As previously reported, a restructuring term sheet was agreed to in early March by IIG and certificateholders representing a majority of the face value of the company's certificates.

Restructuring terms

The restructuring terms include the following:

• Debt relief equal to 54.8% of the nominal amount of the certificates with any accrued profit will be granted by the certificateholders;

• Other restructured creditors will be granting debt relief at differing levels reflecting the status of their debt;

• The remaining debt owed to the restructured creditors, including the certificateholders, will be repaid over a four-year period;

The certificateholders will be repaid 10.8% in the first year, 35.7% in the second year, 42.8% in the third year and 10.7% in the fourth year; and

• A profit participation will be payable in either cash, equity or by way of debt to asset swap if IIG assets exceed specified liabilities, including the amount paid to discharge the debt repayments.

IIG said an important part of the restructuring is the agreement by the company to adhere to the terms of an approved business plan, which includes a managed asset disposal plan.

The company said the restructured creditors will be asked to suspend their claims on forgiven debt until the restructuring payments have been made.

If termination events occur, the suspension of claims will cease to apply if 66.66% of the restructuring creditors by value so elect.

The company said formal restructuring documentation is now being prepared.

IIG is an Al Safaa, Kuwait, investment company.

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