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Bahrain’s Ithmaar signs $167 mln loan with Ahli United
First access to credit mkt under new business model
December 27, 2010 12:40 by Reuters
Bahrain’s Ithmaar Bank has signed a five-year $167 million Islamic loan facility with Ahli United Bank , it said on Monday, marking its return to the credit markets since the financial crisis.
Hit by a 2008 regional real estate crash and a freeze in financing, Ithmaar had suffered heavy losses in 2009. In October 2009 the company said it planned to raise between $400 million to 500 million to repair its balance sheet, through a rights issue and by placing a convertible Islamic bond.
The lender coughed up $103 million in a rights issue in March but did not place the sukuk, as the Bahraini investment sector has been shut out from credit markets since the real estate crush effectively ended its business model of raising money for property and private equity projects.
The bank has since converted itself into a retail lender by swallowing its fully-unit retail unit Shamil, allowing it to edge back to profitability in 2010 while its peers in the sector continue to make losses.
Ithmaar did not disclose the interest rate of the murabaha loan from Ahli United, Bahrain’s largest bank.
(Reporting by Frederik Richter; Editing by Dinesh Nair)