GFH wins investors' nod to raise $500m
Manama, November 24, 2010
Bahrain-based Gulf Finance House (GFH) has won approval from its shareholders to raise funds up to $500 million through a convertible murabaha to boost its capital base and fund growth strategy.
Announcing the investors' backing for its future plans, Esam Yousif Janahi, executive chairman of GFH, said the investors had also given the go-ahead for the acquisition of another 10 per cent stake in Khaleeji Commercial bank.
'They have voted to support the GFH in its plans to improve the bank’s capital structure, strengthen its balance sheet and raise funds to pursue its growth strategy,' he added.
The Islamic investment bank said the approval came after the ordinary and extraordinary meetings held recently.
The shareholders have also approved the recommendation made by the Bank to a consolidate and reverse share split of the issued shares of GFH at a 4:1 ratio, said Janahi.
"This will result in the issued shares being reduced from 1,896,332,565 shares to 474,083,141 shares and reduce the paid up capital of GFH to $145,780,565.93 to eliminate accumulated losses," he added.
A committee of shareholders to assist in the implementation of the bank's plans was also formed in order to review and support the proposed recapitalisation plan, the GFH said in a statement.
Janahi said the capital being raised from the convertible murabaha will enable GFH to take key steps and move forward with plans to recapitalise the Bank, fund acquisitions and provide initial seed capital for investments.
'This will take time but we believe that, with the continuing support of our shareholders, our plans will ultimately place GFH at the forefront of the Islamic financial services market: a market that is over $1 trillion in size and growing at 20 per cent per year,' he remarked.
Janahi thanked the shareholders for their firm and steadfast commitment to its plans and the new growth initiatives. "We understand very clearly the challenges that we face and I know that our shareholders appreciate those challenges too,' he noted.
'The measures we will now implement will help us not only overcome these challenges but emerge as a stronger, better funded and more robust institution,' he added.-TradeArabia News Service