Arcapita unit files for bankruptcy protection
Dubai, May 1, 2012
A unit of Bahrain investment house Arcapita has filed for bankruptcy protection in the US, the company said in a statement.
Falcon Gas Storage Company, a non-operating subsidiary of Arcapita, also intends to file a motion for joint administration with its parent company for the ongoing Chapter 11 restructuring, it said in the statement late on Monday.
In March, Arcapita became the first Gulf entity to file for Chapter 11 bankruptcy protection in the U S after it was threatened with legal action if it did not repay a hedge fund in full.
Falcon's filing is to address liabilities of its 2010 sale of NorTex Gas Storage Company.
'As we have said from the very beginning, our goal in this process is to restructure our balance sheet and reorganise our business to maximize recoveries for all creditors and other constituencies,' Atif A Abdulmalik, Arcapita's chief executive said in the statement.
'We believe the actions we are taking with respect to Falcon are a logical step in this process but we do not anticipate any similar actions with our operating subsidiaries or portfolio companies.'
Arcapita's debt maturity had been regarded as one of the most challenging liabilities facing the region in 2012, given its poor cash position and the difficulty of selling assets to raise cash in a global market pounded by Europe's debt crisis. – Reuters