OREANDA-NEWS. July 1, 2009. The process of state registration of Kuwait-Azerbaijan Investment Company (KAIC) CJSC has completed. The shareholder agreement on the Company was signed in Baku on 30 March between Azerbaijan Investment Company’s (AIC) executive director Afgan Isayev and chairman of board of Kuwait Finance House’s (KFH) subsidiary Turkapital Holding Corporation Favvaz el-Issa.

The Ministry of Taxes reports that KAIC state registration was conducted on 4 June. Its charter capital is AZN 410,000. AIC and Turkapital are the KAIC shareholders.

Earlier Isayev scheduled state registration of the Company until 1st May of the year, but it was conducted with a month delay.

On 30 March 2009 the first meeting of the KAIC shareholders defined the Company’s investment mandate and then conditions on which KAIC will fund projects (minimum and maximum size of investment in a project and a sector).

The KAIK business plan will be made on the basis of investment mandate and operations defined.

The business plan is expected to focus preliminarily on real estate, investments in tocks of private companies, industrial sector, retail sector and other directions.

The agreement signing became possible since the AIC Supervisory Board under chairmanship of Azerbaijan’s Minister of Economic Development Shahin Mustafayev on 14 March made a decision on establishing KAIC.

The KAIC co-founders are AIC and Turkapital Holding Corporation (a subsidiary of the Kuwaiti Finance House; KFH).

Primary charter capital of the newly-established company at the level of \\$500,000 was paid by 75% by Turkapital and by 25% by AIC. For the next two years the new Company will increase its charter capital up to \\$20 million with keeping the initial scheme of equity stake distribution,” it was informed.

KAIC will raise foreign investments and finance project of domestic entrepreneurs.

Practical preparing for realization of the Memorandum of Intentions between KFH and AIC on creation of a joint investment company in Azerbaijan was finished by November 2008, but in connection with staff reshuffles in AIC the decision has not been made finally. The Memo also stipulated KFH’s co-financing for projects directly through its Kuwaiti or Turkish office.

Under initial plans, charter capital of the future joint Company should have been \\$20 million with its payment for \\$10 million in 2008, including \\$2.5 million to be invested by AIC and \\$7.5 million by KFH.

In the future AIC’s stake should have grown up to \\$5 million. Unlike other projects, the AIC/KFH joint company did not plan to draw third investors. Originally it was expected that the Company would raise up to \\$60 million additionally.

In 2008 the KFH Supervisory Board endorsed allocation of \\$15 million for the investment fund. Under the Memorandum, AIC should have acquired 25% and KFH 75% of Investment Fund’s capital stock.

In parallel the co-founders launched co-operation in co-financing the projects. For example, KFH has an interest in the area of commercial real estate (warehouses, business centres, sales premises, etc).

AIC was founded under presidential decree issued March 30, 2006 with working capital of AZN 90 million (\\$104 million) for oil sector development. It can invest up to 20% of capital in a project and up to 35% in an industry.