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KIPCO

Coordinates: 29°22′33″N 47°59′11″E / 29.37583°N 47.98639°E / 29.37583; 47.98639
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Kuwait Projects Company (Holding)
Company typePublic
IndustryHolding company
Founded2 August 1975 as Kuwait Investment Projects Company
HeadquartersKIPCO Tower,
Khalid Bin Al Waleed Street,
Sharq, Kuwait City
Area served
GCC & MENA Region
Key people
Sheikh Hamad Sabah Al Ahmad Al Sabah
(Chairman)
Faisal Hamad Al Ayyar
(Vice Chairman)
ProductsCommercial Banking, AMIB, Insurance, Real estate, Industrial, Investment, Media & Technology
RevenueIncrease US$2,042 million (2014)[1]
Increase US$157 million (2014)[1]
Total assetsIncrease US$31.9 billion (2014)[1]
Total equityIncrease US$4.4 billion (2014)[1]
Number of employees
12000[2]
Websitewww.kipco.com 29°22′33″N 47°59′11″E / 29.37583°N 47.98639°E / 29.37583; 47.98639

Kuwait Projects Company (Holding), known as KIPCO, is an investment holding company in the Middle East and North Africa (MENA) region, with consolidated assets of US$ 31.4 billion as of 30 September 2015. The Group has significant ownership interests in a portfolio of over 60 companies operating across 24 countries.The group's main business sectors are financial services, media, real estate and manufacturing. Through its core companies, subsidiaries and affiliates, KIPCO also has interests in the education and medical sectors.[3]

History

KIPCO was incorporated on 2 August 1975 under Article 94 of the Kuwaiti Commercial Companies Code, Law No. 15 1960.[4] Since incorporation, the company has grown substantially and made significant investments in a diversified portfolio of companies operating throughout the GCC and the wider MENA region.

Key Milestones

1988 Acquisition of United Gulf Bank (UGB)[5]
1995 Acquisition of stake in United Real Estate Company (URC)[6]
1995 Acquisition of stake in Burgan Bank
1995 Formation of Gulf DTH (Showtime)
1996 Acquisition of stake in Gulf Insurance Company (GIC) – now Gulf Insurance Group[7]
1996 Acquisition of United Industries Company (UIC)
1996 Acquisition of SADAFCO - Saudia Dairy and Foodstuff Company - by UIC
1998 Formation of KAMCI – KIPCO Asset Management Company[8]
1999 Acquisition of stake in Wataniya Telecom[9]
2006 Establishment of US$2 billion EMTN programme[10]
2007 Sale of Wataniya Telecom
2009 Merger of Showtime and Orbit to create OSN[11]
2009 Completion of a 7 year US$500 million bond issue under EMTN programme[12]
2010 Completion of a 7 year US$500 million bond issue under EMTN programme[13]
2010 Sale of 39.2% stake in GIC to Fairfax[14]
2010 KIPCO acquires 34% direct stake in URC by subscribing to rights issue in Dec’10[15]
2010 Acquisition of 40.3% stake in UIC, 28.4% during rights issue and 11.9% from KAMCO in Sep’10[16]
2012 Burgan bank acquires 99.3% in Eurobank Tekfen (rebranded as Burgan Bank – Turkey)[17]
2013 OSN acquires 100% stake in Pehla (region’s largest provider of South Asian pay TV content)[18]
2013 Burgan Bank & UGB jointly acquired ~49% stake in Fimbank, Malta[19]
2013 UIC purchases additional 10.8% stake in Qurain Petrochemical Industries Company(QPIC)[20]
2013 UIC divests 29% stake in SADAFCO for KD66 mn[21]
2014 Completion of a 5 year US$500 million bond issue under EMTN programme[22]
2014 UIC divests remaining 11% stake in SADAFCO for KD25mn
2014 Burgan Bank completed the issuance of USD500mn perpetual bond[23]
2014 Burgan Bank successfully raised capital worth KD102.6 million through a rights issue[24]
2015 OSN secures second Syndicated Financing Facility for US$400 million[25]

Corporate Governance

KIPCO is a strong supporter of promoting transparency of operations, thereby launching its annual Shafafiyah (transparency) investors’ forum in 2004.[26] In this forum, KIPCO and its Group companies shed light on ethical and responsible decision making methods, while safeguarding the integrity of financial reporting. KIPCO has made timely and balanced disclosures, while efficiently recognising and managing risk.

Board of Directors[26]

Name Position
Sheikh Hamad Sabah Al Ahmad Al Sabah Chairman
Faisal Hamad Al Ayyar Vice Chairman
Abdullah Yacoub Bishara Board Director
Sheikh Abdullah Nasser Sabah Al Ahmad Al Sabah Board Director
Sheikh Sabah Nasser Sabah Al Ahmad Al Sabah Board Director

Executive Management[26]

Name Position
Faisal Hamad Al Ayyar Vice Chairman (Executive)
Samer Subhi Khanachet Group Chief Operating Officer
Masaud Mahmoud Jowhar Hayat Chief Executive Officer, Banking
Tariq Mohammad Abdulsalam Chief Executive Officer, Investments
Pinak Maitra Group Chief Financial Officer
Khaled Abdul Jabbar Al Sharrad Group Chief HR and Administration Officer
Declan Sawey Group Treasurer
Mohsen Ali Husain Group Chief Audit Executive
Mazen Isam Hawwa Group Senior Vice President, Finance and Operations
Robert Drolet Senior Vice President, Technology and Media
Adel Jassem Al Waqayan Treasurer
Osama Talat Al-Ghoussein Senior Vice President, Banking
Eman Mohammad Al Awadhi Group Communications Director
Iqbal Mohamed President, United Gulf Management Inc. USA

Shareholding Structure

KIPCO’s principal shareholder is Al Futtooh Holding Company (AFH), a Kuwaiti holding company owned by members of the Kuwaiti ruling family, with a direct holding of 44.7% as of 30 September 2015. The remainder of the shares are primarily held by institutions, equity funds, high-net-worth individuals and retail investors.

The following table sets out the percentage holdings of the Company’s shareholders as at 30 September 2015:[27]

  Percentage Holding
Al Futtooh Holding Company K.S.C. (Closed)
44.7
Investment Companies & Other institutions
38.6
Investment Funds
7.4
High Net Worth Individuals & Retail Investors
7.3
Treasury shares (KIPCO Parent)
2.0

Group Structure

The principal subsidiaries and associates of KIPCO are in the financial services and real estate sectors, and KIPCO also has a joint venture in the media sector. The remaining companies of the Group and its associates operate in the service and industrial sectors.

The table below sets out the KIPCO’s Principal Companies:

  Financial Services Media Real Estate
  United Gulf Bank Gulf Insurance Group Burgan Bank OSN United Real Estate Company
Geographic presence in MENA
7 countries
10 countries
11 countries
24 countries
8 countries
Shareholding
97.2%
45.7%
64.6%
60.5%
70.8%

Principal Companies/ Key Subs and Associates[4]

  • Burgan Bank: Burgan Bank is the 2nd largest conventional bank in Kuwait in terms of assets offering a full range of banking services to both retail and commercial customers. It operates under four divisions which are corporate banking, retail banking, private banking and investment banking and treasury.
  • Panther Media Group (PMG): PMG is the largest digital satellite premium Pay TV operator in MENA region operating under the brand name "OSN". It offers exclusive Western and Arabic content and has exclusive contracts with all 8 major Hollywood studios. As at 30 June 2015, OSN had over one million subscribers.
  • United Gulf Bank (UGB): UGB is a leading asset management and investment banking group, with operations spanning the MENA region. The bank engages primarily in asset and fund management, investment banking, private equity, and corporate finance.
  • Gulf Insurance Group (GIG): GIG is the market leader in Kuwait (by GPW and Direct Premiums), Bahrain and Jordan (by GPW) and Egypt (by Technical profit) among the private sector. GIG's product portfolio includes marine, aviation, property, casualty, motor, life and health insurance.
  • United Real Estate Company (URC): URC is the 3rd largest listed real estate player on KSE in terms of assets. URC is an integrated real estate company, which invests in, manages and develops real estate properties in Kuwait and within the MENA region.
  • United Industries Company (UIC): UIC invests in the downstream industries sector in Kuwait and the GCC states and it operates a diversified portfolio of investments in the energy, food and basic industries sectors.
  • Others: KIPCO directly or indirectly holds more than 20 companies which are engaged in other businesses. The major entities engaged in other businesses are Advance Technology Company, United Education Company, Kuwait United Consultancy Company, United Capital Transport Company etc.

Business Strategy

The key elements of the Group's strategy are to:[4]

  • Leverage its position and reputation in the GCC and wider MENA regions to capture further growth in these regions
  • Acquire, create, build and selectively sell businesses in sectors that capitalise on regional opportunities
  • Exercise management control over businesses
  • Maximise value from businesses with a medium-to long-term horizon

Regional Presence

The Group and its associates have a presence in the following countries in the MENA region:[4]

Company Present in
Burgan Bank Kuwait, Jordan, Iraq, Algeria, Tunisia, Turkey, Malta, Lebanon (branch of Bank of Baghdad), Cyprus (branch of Jordan Kuwait Bank), Palestine (two branches of Jordan Kuwait Bank) and Libya (representative office of Tunis International Bank)
United Gulf Bank Bahrain, Kuwait, Tunisia, UAE, Syria, Malta and Morocco
Gulf Insurance Group Kuwait, Saudi Arabia, Lebanon, Egypt, Syria, Jordan, Bahrain, UAE, Iraq and Algeria
Panther Media Group Ltd (PMG) Licensed to operate in 24 countries in the MENA region; however, it currently operates in 19 countries
United Real Estate Company Kuwait, Jordan, Egypt, Oman, Syria, UAE, and Lebanon
United Industries Company Kuwait

Credit Rating

KIPCO[28] S&P Moody’s Capital Standards
Long Term
BBB-
Baa3
A+kw
Short Term
A3
Prime 3
BBB+
Outlook
Stable
Stable
Stable

Corporate Social Responsibility

The Protégés Program[29]

The Protégés is a mentorship program designed to provide young people with opportunities to learn life and leadership skills, through combination of travel, lectures, group activities, challenges and games for around 6 weeks. Around 25 Protégés are selected based on a thorough screening process ensuring that they meet high standards of excellence. KIPCO is the strategic partner of the program and is supported by nine Group companies.

Dyslexia Campaign

Dyslexia Campaign is KIPCO's initiative for public awareness about Dyslexia.The campaign – which featured TV and press advertising to highlight the problems faced by those people suffering from dyslexia – was the first of its kind in the Gulf region.[30] In 2008 KIPCO won an award for the campaign on dyslexia at Kuwait's first Corporate Social Responsibility (CSR) Awards.[31]

References

  1. ^ a b c d KIPCO Financial Statements 2014, RNS Market News, 18 March 2015
  2. ^ KIPCO Overview, Data Monitor, 09 May 2014
  3. ^ "KIPCO - press release" Zawya News. 02 November 2015
  4. ^ a b c d "EMTN Prospectus 2015" KIPCO Website 03 November 2015
  5. ^ NBK Capital report, Arabtimesonline.com, 12 February 2014
  6. ^ URC Prospectus, LSE 5 May 2007
  7. ^ Global Research-Kuwait Global Investment House, April 2009
  8. ^ KAMCO News Kuwait times, 04 June 2014
  9. ^ KIPCO World, 2014
  10. ^ "KIPCO share of Wataniya sale deal with QTEL finalized" Kuwait News Agency (KUNA), 13 March 2007
  11. ^ "Showtime Arabia, Orbit announce TV merger" Business.com, 12 July 2009
  12. ^ Global Research-GCC Global Investment House, November 2009
  13. ^ "KIPCO completes US$500m bond issue" Investegate, 12 July 2010
  14. ^ "Fairfax unit to buy 39% of Gulf Insurance Co." Businessinsurance.com, 20 September 2010
  15. ^ "KIPCO raises stake in real estate firm URC" Arabianbusiness.com, 25 January 2011
  16. ^ "Kipco boosts stake in United Industries" Gulfbase.com, 04 July 2010
  17. ^ "Burgan Bank Concludes Purchase of Eurobank Tekfen" Bloomberg.com, 23 December 2012
  18. ^ "OSN acquires Pehla" Khaleej Times, 27 August 2013
  19. ^ "Kuwait's KIPCO takes majority stake in Malta's Fimbank" Reuters.com, 30 May 2010
  20. ^ KIPCO News Gulfbankers.com, 01 April 2014
  21. ^ "United Industries divests 29% of SADAFCO in special transaction" Mubasher.info, 05 November 2013
  22. ^ "KIPCO successfully prices US$ 500 mn bond issue" RNS Market News, 03 Feb 2014
  23. ^ "Burgan Bank issues USD500m additional Tier 1 capital" Zawya News, 24 September 2014
  24. ^ "Rights issue by Burgan Bank" Banking Frontiers
  25. ^ "OSN secures $400 million syndicated financing facility" Arab News, 8 September 2015
  26. ^ a b c KIPCO Annual Report-2014
  27. ^ Shareholding Pattern KIPCO Corporate Website retrieved November 30, 2015
  28. ^ Credit Rating KIPCO Website 09 November 2015
  29. ^ "Proteges Third Generation officially launched in Kuwait" Kuwait Times, retrieved July 21, 2014
  30. ^ "KIPCO Sponsors Dyslexia Awareness Campaign" PRWeb, September 10 2007, retrieved July 21, 2014
  31. ^ "KIPCO's Dyslexia Campaign Wins Corporate Social Responsibility Award" Zawya, Jan 23 2008, retrieved July 21, 2014
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