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GFH plans $230m sukuk issue for acquisitions

MANAMA, February 26, 2015

Bahraini Islamic investment firm GFH plans to make a $230 million sukuk issue this year to help it fund acquisitions of two to three regional companies, the bank's chairman said.

The bank sold $170 million of convertible sukuk murabaha last year to raise money for investments, Dr Ahmed Al Mutawa said on the sidelines of GCC Financial Forum.

The paper was converted into equity in the same year, said a report in the Gulf Daily News (GDN), our sister publication.

In addition to the funds raised through sukuk last year and this year, the rest of the money needed for the acquisitions is likely to come from bank borrowing, Dr Al Mutawa said.

The bank is borrowing from financial markets again as it recovers from a debt restructuring that was prompted by a decline in asset values and hefty borrowing during the global financial crisis.

GFH is in talks to buy two asset management companies for a total of up to $500 million, chief executive Hisham Al Rayes said earlier.

Dr Al Mutawa said this week that the two to three companies targeted by GFH focused on asset and wealth management and were based in Saudi Arabia, Bahrain and Dubai. The deals, which involve taking controlling stakes, should be closed by the end of the second quarter.

GFH was granted approval by shareholders in April last year to raise up to $500m through sales of convertible sukuk to help fund its expansion plans and service debt.

"The bank may review its sukuk plans if oil prices remain under pressure for a prolonged time, potentially subduing investor demand for new issues." - TradeArabia News Service




Tags: sukuk | GFH | Companies | acquisition | regional |

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