Kuwait Finance House, the country's biggest Islamic lender, said on Sunday it has signed a deal with Gulf Investment House to restructure the KD49.5 million ($180 million) it owes in debts.

The agreement 'includes converting the current debts from short term to medium term for a period of five years. The agreement was signed in collaboration with Boubyan Bank and Burgan Bank,' KFH said in a statement.

KFH, which owns a 30 per cent stake in GIH, said it 'is confident GIH will be able to continue to operate in line with its vision over the upcoming period as a result of the debt re-structuring.'

The agreement comes under the financial stability law, it added.

Problems at Kuwaiti investment firms, led the government of the world's fourth-largest oil exporter to approve a 'Financial Stability Law' rescue package worth $5.2 billion in 2009.-Reuters