Ithmaar to hold rights issue in January

Bahrain bank hopes rights issue will raise $200m to help shore up its balance sheet.

Bahrain-based Islamic lender Ithmaar will hold its planned rights issue in January, and has no exposure to Dubai's debt, its chief executive said on Monday.

Ithmaar said it would raise $400-$500 million through a mixture of a rights issue, worth around $200 million, a convertible Islamic bond and a credit call option to shore up its balance sheet.

Speaking to Reuters at the sidelines of a conference in Manama, Mohamed Hussain, the cheif executive of Ithmaar , told Reuters: "If you ask me for the target launch date, I would say the first week of January, the first ten days."

Like other investment houses in Bahrain, Ithmaar is seeking to recapitalise after posting losses due to provisions against bad loans and lower real estate valuations.

In October, Ithmaar said it would become a retail Islamic bank by integrating its fully owned unit Shamil Bank.

Hussain said Ithmaar and its units had no exposure to billion dollars in debt that government-owned conglomerate Dubai World has said it will restructure.

"We have zero exposure to Dubai bonds or sukuk. No exposure at all," he said.

However, Hussain said the troubles in Dubai have hit confidence in regional banking markets.

"I think certain damage has been done and I think certain international banks have already reacted and some of them have even overreacted by pulling lines to banks in this region," he said.

"Because the lack of transparency on which bank has how much exposure makes it a general market problem and everybody thinks that everybody is exposed," he added.

(Reuters)

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