Gulf Finance House reaches Wakala facility debt restructuring accord

Gulf Finance House BSC GFH or the Bank, the Bahrain-based Islamic Investment Bank, announced today that it has successfully restructured the remaining debt on a syndicated Wakala facility amounting US$ 100 million led by Bahrain-based Liquidity Management Centre LMC. GFH has already paid US$ 55 million of the total amount in the past and now has restructured the remainder.

As per the new restructuring terms, GFH will repay the remaining debt over a period of six years, including a two-year grace period, with the final maturity date being September 2018. The amortization of the principal amount will start from April 2014. The syndicates involved in this Wakala facility include Emirates Islamic Bank, Bahrain Islamic Bank, Liquidity Management Centre and Liquidity Management House.

Commenting on the announcement, GFH’s Acting Chief Executive Officer, Hisham Alrayes said, “The restructuring of the Wakala facility is another positive development for the Bank which will facilitate greater financial flexibility as the bank continues to accelerate and get back to long-term profitable growth. This agreement follows the approval on the GFH Sukuk restructuring which was secured recently. By retaining our key assets and extending the debt maturities, GFH has managed to enhance its balance sheet significantly and bolster its liquidity position moving forward.”

Mr. Ahmed Abbas, Chief Executive Officer of the Liquidity Management Centre (LMC) said: “This latest agreement is the second major restructuring deal we have done on behalf of GFH over the past few months. These agreements show the willingness of the bank to respond to market conditions and be sustainable for the future; and are also the reflections of the confidence the creditors’ and shareholders’ places in GFH’s strategy, and provides a considerable boost to the Bank’s future growth prospects.”

Earlier in May 2012, GFH had announced that the Bank successfully obtained the approval of its Sukuk holders to restructure its outstanding debt amounting to US$ 110 million. The GFH Sukuk is expected to mature in June 2018, which also provides GFH a two-year grace period for the principal repayment amount in 2012 and 2013.  Both Liquidity Management Centre (LMC) and KPMG acted as Advisors for this transaction.