GIG extends letters of guarantee for terminated ‘Afia 3’ contract

KUWAIT CITY, November 16: Gulf Insurance Group Company announced to Stock Exchange Kuwait on Thursday that it has received notification from two local banks regarding the Ministry of Health’s request for a letter of guarantee extension for the terminated “Afia 3” loan for a total amount of 47.7 million Kuwaiti dinars . The contract, according to Al-Seyassah newspaper.

The contract was officially terminated by the Ministry in September 2024. The company confirmed, through the National Bank of Kuwait, the extension of three letters of guarantee for 22.32 million dinars, valid for three years from the expiration date on December 31, 2024; 3.38 million dinars through Kuwait National Bank, valid for one year, and 22 million dinars through Burgan Bank, valid for one year and will expire at the end of 2024. GIG emphasized in its statement that it could not determine the financial situation at the moment. Effect of extension due to unresolved issues regarding termination of the contract.

Economic expert Mohamed Ramadan told Al-Seyassah that the Ministry of Health’s request to extend the letters of guarantee underlines that the financial agreement between the Ministry and the company has not yet been completed. Ramazan noted that there is a possibility that the Ministry may request financial compensation from Gulf Insurance within the scope of the contract termination process. He added that the statement highlighted the pending nature of the settlement talks, leading the company to claim that it could not assess the financial implications of the extension until a genuine resolution was achieved. This development leaves the financial consequences of the termination of the “Afia 3” contract unclear and signals that negotiations are continuing between the parties involved.