Goldman Sachs Loan Leads Bahrain’s Arcapita Out of Chapter 11Samuel Potter
Arcapita Bank BSC, the Bahrain-based investment house that filed for Chapter 11 in the U.S. last year, exited bankruptcy after receiving a $350 million loan from Goldman Sachs International.
Under the terms of the restructuring deal, a new entity named RA Holding Corp., owned by the creditors, will realize the value of Arcapita’s investment portfolio, the bank said in a statement on its website. The Goldman Sachs-led loan will fund cash flow requirements of the new entity and pay obligations connected to the restructuring, it said.
Companies including Kuwait’s Global Investment House KSCC, Dubai World Corp. and Dubai-based Nakheel PJSC were forced to restructure billions of dollars of debt after lending evaporated and asset values plummeted during the global credit crisis. Arcapita filed for bankruptcy in March 2012 after negotiations with creditors over a $1.1 billion syndicated loan failed.
“Chapter 11 was a challenging experience, but one which has enabled us to deliver a solution in the best interests of our investors, creditors, and other stakeholders,” Chief Executive Officer Atif Abdulmalik said in the statement. “We will be able both to assist RA and investors to maximize the value of the existing investment portfolio and to undertake new investment opportunities.”
The existing management team at Arcapita will continue to lead the bank’s investment portfolio with the aim of maximizing sale values.
The reorganization is effective from Sept. 17.