Bahrain-based investment fund Arcapita has decided not to sell Northern Irish electricity company Viridian as buyers struggled to raise sufficient financing, banking sources said.

'The mandated lead arranger process on the loan has been halted. They (Arcapita) couldn't get the price they wanted and the whole sale is off,' a banker close to the deal said.

An Arcapita spokesman declined to comment.

Arcapita hired Dresdner Kleinwort earlier this year to advise on a strategic review of the group, including the sale of Viridian for a target amount of around two billion euros ($2.5bn).

Since then, the credit crisis had increased the completion risk of the sale, sources said.

Germany's RWE and Irish state-owned Bord Gais were among parties interested in the sale according to Press reports.

Arcapita acquired Viridian last year, backed with a £1.87bn ($2.89bn) leveraged loan arranged by mandated lead arrangers and underwriters Dresdner Kleinwort, Barclays, Citigroup and HSBC. Dresdner Kleinwort was the sole bookrunner.