Gulf Finance House EC is negotiating with banks to roll over $100 million in an Islamic loan into a new two-year facility as it prepares to sell assets to improve liquidity, acting Chief Executive Officer Ted Pretty said.
“We are highly confident that we will be able to announce that rollover in the next few working days,” Pretty said in a phone interview from Bahrain.
The rollover will help the Bahrain-based investment bank to extend the maturity of two $50 million tranches of Wakala debt due in March this year and next, he said.
Gulf Finance posted a full-year loss of $728 million, it said Feb. 14. The lender had its credit ratings slashed six steps to CC this month by Standard & Poor’s, which said its liquidity position was under “immediate and severe stress.”
Gulf Finance said Feb. 10 it repaid a $200 million loan to 32 lenders led by German bank WestLB AG and refinanced another $100 million of debt through a six-month Murabaha facility.
“In the current environment when liquidity is much tighter, it’s prudent to manage your balance-sheet actively, and look at assets that have reached realistic valuations,” Pretty said.
Gulf Finance House has identified $420 million worth of assets for sale that include $190 million of real-estate and infrastructure related assets, while the rest are linked to its stakes in financial companies, he said.
“We expect to close $250 million in asset sales by the end of second quarter,” Pretty said. “We have taken substantial provisions. Our balance-sheet now reflects the realistic values to the market.”
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