MANAMA: Bahrain-based Islamic investment bank Arcapita has secured more than two thirds of a $400 million rights issue from existing shareholders and hopes to conclude the deal by the end of this month, its chief executive said.
"We are talking to existing shareholders as we speak," Atif Abdulmalik told the Reuters Islamic Banking and Finance Summit yesterday.
"We have secured commitments for more than two thirds of the rights issue."
The bank expects to raise the rest of the rights issue from strategic investors or Gulf sovereign wealth funds, he said.
Arcapita had completed a reduction of its short-term liabilities to 'not even' $300m from between $800m to $900m, Abdulmalik said, adding that the bank was now well-capitalised with a $300m facility signed at the end of last year.
"We are well-funded," Abdulmalik said, adding that Arcapita had either extended the maturity of the loans or paid them off completely.
Arcapita was not planning to issue any more notes in the near future, he said.
The rights issue comes after several revisions from ratings agency Standard & Poor's.
Arcapita wants to conclude two acquisitions in the Asian infrastructure or real estate sectors by June and is also still in the running for buying up the assets of troubled Australian power investment firm Babcock & Brown Power, he said.
BBP, managed by investment bank Babcock & Brown, began to seek bids in October after getting approaches for its assets or an outright sale. The company, which lost 96 per cent of its market value last year, has been selling plants to reduce debt and bolster its balance sheet.
Arcapita also wants to launch a "senior lending fund" focusing on the US, of which details would be made public in two weeks, Abdulmalik said.
A planned $3.5 billion residential real estate project in Qatar with Kuwait's Al Imtiaz Investment was on track, as was a $2bn wind park project in China.
"Even in this difficult market we were lucky last week to secure debt for it," he said, adding that the existing portfolio for the wind park stood at $200m, to be built up to $1bn.
A further $1bn would be raised through debt, he said.
Arcapita was also working on the sale of one of its US-based companies by the end of June, Abdulmalik said.
The bidding process for the around $400m deal was in the second or third round, he said, but declined give further details. According to its website, Arcapita lists at least 20 US-based companies under its current investments.
