Ahli United Bank, Bahrain's largest lender, received a request from the International Finance Corporation (IFC) to convert subordinated debt to shares in the bank, it said in a statement on Sunday.

The bank did not disclose how much debt would be converted, however 118.61 million new ordinary shares with a value of $0.8431 per share would be issued to IFC subject to regulatory approval, the bourse filing said.

Ahli United's shares were flat at $0.805 at 0840 GMT.

The number of shares being issued accounts for roughly 2 percent of the bank's current share capital, according to Reuters calculations.

After the conversion, the IFC's stake in Ahli United Bank will reach 5.16 percent, comprising a 2.29 percent direct holding in the bank and a 2.87 per cent stake through its IFC Capitalization (Equity) Fund, the statement said.

Ahli United Bank and IFC signed a $200 million subordinated loan and conversion option agreement in November 2006. – Reuters