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ARCAPITA CLOSES $200 MILLION FACILITY WITH STANDARD CHARTERED BANK (May 23, 2010) - Arcapita Bank B.S.C.(c), announced today that it has closed a $200 million facility with Standard Chartered Bank. The facility will be used by Arcapita for balance sheet strengthening and corporate purposes. V. Shankar, CEO of Standard Chartered Bank for Europe, Middle East, Africa and Americas commented “Standard Chartered has built a close relationship with Arcapita over several years and we know their business well. The past 18 months have been difficult for all asset managers. Those such as Arcapita, managing portfolios with longer term maturity profiles, have faced particularly demanding conditions. We have been impressed by the way Arcapita’s management team has tackled the considerable challenges presented, demonstrating the resilience of the organization and the value of their strong network of relationships in the GCC. We are satisfied that the adaptations they are making to their business model will be effective in moving them back towards growth, and we are pleased to support this goal with this facility.” Arcapita’s original business model focused exclusively on using its balance sheet to fund deals in the private equity, infrastructure and real estate sectors, which it then syndicated out to investors in the Gulf region, largely ultra high net worth individuals and family offices. In the last 12 months, Arcapita has begun to introduce funds into its portfolio, assisting access to the large pools of institutional money in the GCC and other parts of the world. “Before the crisis, Arcapita drew up plans to introduce funds into the mix of products we could offer to investors” stated Atif A. Abdulmalik, Arcapita’s CEO. “Those plans were put on hold whilst we dealt with the numerous challenges thrown up by the recent financial crisis. However, I am pleased that after a period during which attention was consumed by the demands of the bank’s balance sheet and by our existing portfolio of investments, we are now in a position to readdress our medium term goal of introducing a range of funds into the business. Although we expect that further fair value adjustments will result in the bank booking a sizable financial loss for this financial year, we believe the steps we are taking now will help us return to profitability next year. This financing from Standard Chartered is important. It helps to give us the liquidity cushion we need to put our business back into growth. And it is a valuable endorsement of our strategic direction, and the strength of the institution.” In February this year, Arcapita launched a $500 million Real Estate Income Fund with Al Rajhi Capital. The fund will invest in high-quality, income-generating real estate assets, in the Kingdom of Saudi Arabia and other countries of the GCC.
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