Shareholders in Kuwait's Global Investment House on Sunday approved a final plan for the company's $1.7 billion debt restructuring that will create new special purpose vehicles (SPVs) to take on its debts.

The Kuwaiti investment company and asset manager, undergoing its second debt restructuring in three years, will create at least two SPVs as part of the plan.

One will hold company assets along with a debt of $1.3 billion. Another SPV will take part in a capital increase for the parent company and will carry a debt equivalent to $430 million, the managing director Maha al-Ghunaim told a news conference.

'One special purpose vehicle is going to hold the assets from our balance sheet which will be moved to that company,' Ghunaim said.

'The other SPVs, one SPV or more that are going to be created, will participate in the capital increase of the company and it is going have a debt equivalent to $430 million,' she said. There is no reduction in principal as a result of the plan.

According to the proposal, Global will offer KD122.2 million ($434 million) of new shares, which will be held by one or more of the SPVs. The whole plan is still subject to creditor approval.

'We know there has been good progress (in getting approval), we know a percentage of the banks have agreed...we are positive,' Ghunaim told reporters.

'The core fee business of the company will remain protected from any volatility in the market or burdens on interest expense and debt that seem to be difficult moving forward.'

Global was one of several Kuwaiti investment firms hit hard by the global financial crisis. Sources said in January that Global had laid off 17 percent of its staff, or 60 employees out of 350, across the Gulf region as part of cost-cutting measures at the debt-laden firm.

Global, which counts the governments of Kuwait and Dubai as major shareholders, asked bank creditors in September last year t o suspend payments on a 1.7 billion plan agreed in 2009.

Shares in Global have not traded on the Kuwait Stock Exchange since December after the bourse suspended the stock for having accumulated losses which exceeded 75 per cent of its capital.-Reuters