Bahrain's Ithmaar signs $167m loan with Ahli United

Ithmaar had suffered heavy losses in 2009 on regional real estate crash and a freeze in financing
ISLAMIC FINANCE: Bahrains Ithmaar Bank has signed a five-year $167m Islamic loan facility with Ahli United Bank
By Reuters
Mon 27 Dec 2010 01:10 PM

Bahrain's Ithmaar Bank has signed a five-year $167m Islamic loan facility with

Ahli United Bank, it said on Monday, marking its

return to the credit markets since the financial crisis.

Hit by a 2008 regional real estate crash and a freeze in

financing, Ithmaar had suffered heavy losses in 2009.

In October 2009 the company said it planned to raise between

$400m to $500m to repair its balance sheet, through

a rights issue and by placing a convertible Islamic bond.

The lender coughed up $103m in a rights issue in

March but did not place the sukuk, as the Bahraini investment

sector has been shut out from credit markets since the real

estate crush effectively ended its business model of raising

money for property and private equity projects.

The bank has since converted itself into a retail lender by

swallowing its fully-unit retail unit Shamil, allowing it to

edge back to profitability in 2010 while its peers in the sector

continue to make losses.

Ithmaar did not disclose the interest rate of the murabaha

loan from Ahli United, Bahrain's largest bank.

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