ARCAPITA FILES TO PROTECT ITS STAKEHOLDERS
Manama, March 19, 2012 – Arcapita Bank B.S.C.(c), the international investment firm
headquartered in Bahrain, announced today that it and several of its affiliates, including
Arcapita Investment Holdings Limited, have filed voluntary cases in the United States under
Chapter 11 with the goal of developing and confirming a plan of reorganization. Arcapita's
Board of Directors has approved this course of action as the most effective way to protect their
business and assets and implement a comprehensive restructuring that rationalizes Arcapita's
capital structure and maximizes recoveries to creditors and other stakeholders. The filings
automatically imposed a worldwide injunction against collection and enforcement actions that
will protect the assets of the Arcapita entities while a plan of reorganization is formulated.
None of Arcapita's operating subsidiaries or portfolio companies are included in the filing.
Atif A. Abdulmalik, Chief Executive Officer of Arcapita said, "In the last three years, Arcapita
has succeeded in managing its business to counter the effects of the financial crisis. During
this period, Arcapita has repaid $1.7 billion in maturing bank facilities, and stepped in with a
further $900 million to support its investment portfolio. After plans to refinance a $1.1 billion
financing facility coming due on March 28th 2012 were negatively impacted by the Eurozone
crisis, Arcapita commenced discussions with the facility participants to extend it by three
years. These negotiations started several weeks ago and began as a consensual and
constructive process with the bank group which has supported us extensively through the
downturn. However, the actions of certain non-bank creditors have precluded Arcapita from
reaching such a consensual resolution before the March 28th maturity date, jeopardizing
Arcapita's ability to satisfy its fiduciary duties to its stakeholders. The filings offer Arcapita the
necessary protection it needs to complete productive negotiations with all parties."
Mohammed Abdulaziz Aljomaih, Chairman of Arcapita's Board of Directors stated, "After
reviewing all the available options with management and its financial and legal advisors, the
Board has agreed that a filing for protection under Chapter 11 is not only a necessary step, but
the best course of action, to safeguard the interests of the bank's stakeholders. It will allow
Arcapita to restructure its balance sheet and reorganize its business to maximize recoveries for
all creditors and other constituencies."
The provisions allow the filing companies to continue to operate their businesses and manage
their properties under the direction and control of their Boards and management. Thus, during
the process, Arcapita's management team will be able to conduct business in the ordinary
course. All of the portfolio companies will continue to be managed by Arcapita's deal
professionals and decisions related to asset disposal will also remain with Arcapita. Arcapita
will continue to manage approximately $7.4 billion of assets. At the same time, Arcapita will
engage in discussions with its creditors and other stakeholders to develop an acceptable plan
of reorganization which allows the company to emerge as an even stronger and more viable
Mr. Abdulmalik added "This was a difficult decision. But after lengthy review of all the
alternatives open to us, there is no question that this is the right course of action, which we
are taking with the support of the Board. The Central Bank of Bahrain has been informed and
we will continue to have a dialogue with the regulators. Arcapita is committed to completing
this reorganization as quickly and efficiently as possible. Our aim is to maximize recoveries for
the benefit of all stakeholders. We have sufficient liquidity to manage our business and are
fully focused on minimizing disruption to our investment portfolio, which Arcapita's
professionals will continue to manage on behalf of our investors. Asset sales will only be
carried out at a time we consider to be the appropriate point in the investment cycle. The
Arcapita platform, with its ability to distribute high quality alternative investments in the GCC
and beyond, remains strong and well respected. We have close and longstanding relationships
with our investors, partners and relationship banks and we are very grateful for their steadfast
support. I have full confidence that as economic fundamentals improve, we will continue the
profitable business of buying, improving and selling investments around the world, generating
returns for our investors and value for all our stakeholders."
Arcapita's legal advisors are Gibson Dunn & Crutcher and Linklaters, and its financial advisor is
For a copy of the press release, click here.
To review some frequently asked questions, please click here.
Further information and documents relevant to the filing can be found by clicking http://www.gcginc.com/cases/arcapita
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