In light of the continuing repercussions of the Corona pandemic on the reality of many companies, mergers and acquisitions are dynamically active in Kuwait, which Moody’s affirmed its sovereign credit rating at A1 with a stable outlook.
Two days ago, and in an indication of this trend, the Kuwaiti Kuwait Projects Company Holding Company (KIPCO), a holding group focused on investing in the Middle East and North Africa, expected to complete its merger with Al-Qurain Chemical Industries this year.
This bolstered the Kuwaiti Stock Exchange, which has boosted its gains by 18 percent since the beginning of the year, after the “KIPCO” shares rose by 4.9 percent on Sunday.
This followed Standard & Poor’s announcement that the holding company, which considers the debt-to-market value ratio of its investments to be high, will struggle to improve its financial position if the deal fails.
KIPCO continues to work on making the deal a success
In a statement, Senior Vice President of Communications and Investor Relations for the Group, Eman Al-Awadi, said: “In parallel with the efforts of the executive management at Kuwait Projects Company (KIPCO) to secure the necessary funding to meet our obligations and maintain our financial position, we continue to work on the success of the merger deal with Al-Qurain Chemical Industries Company.”
She explained that the merger deal “is progressing according to schedule with the due diligence process going well, and we are confident to complete this deal before the end of the year.”
The company’s board of directors will hold a meeting Thursday, June 2, to consider the assets evaluation report and the investment advisor’s opinion on the merger process.
The Kuwait Projects Company already controls about 29.5 percent of the capital of the “Qurain” company. The total assets of “Qurain” amounted to 780 million Kuwaiti dinars (about $2.6 billion) by the end of 2021, compared to less than $375 million in loans.
KIPCO announced earlier this month that it made 3.12 million dinars ($10.2 million) in net profit during the first quarter of 2022, compared to a loss of 8.44 million dinars a year ago. This transformation is due to “the positive results of the group’s companies in the banking, insurance, real estate and petrochemical sectors,” according to a statement by the group.
