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Thu 3 Feb 2011 11:31 AM

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Bahrain's Unicorn repays $125m Murabaha facility

Investment bank drops plans to buy Dubai Group's 40% stake in Malaysia's Bank Islam

Bahrain's Unicorn repays $125m Murabaha facility
BAHRAIN BANKING: \nInvestment banking in Bahrain has been hard hit by a regional property crash in 2008 (ITP Images)

Bahrain's Unicorn Investment Bank,

which said it repaid a $125m Islamic credit facility on

Thursday, has dropped plans to buy Dubai Group's 40 percent

stake in Malaysia's Bank Islam, a top executive said.

Dubai Group, an investment vehicle owned by the ruler of

Dubai, said in October 2009 it was reviewing options for the

stake in Malaysia's second-largest Islamic bank as it shifts its

focus closer to home.

Unicorn had been mulling the purchase of that stake.

"We get shown various opportunities in Malaysia but this

deal did not make sense to us," Ikbal Daredia, acting chief

executive of Unicorn, said in a telephone interview on Thursday.

The investment bank, founded in 2004, expects its first

annual loss in 2010, Daredia said. He added he expects a return

to profitability in 2011.

Investment banking in Bahrain has been hard hit after a

regional property crash in 2008. Unicorn's business is slightly

more diversified than other Bahraini investment houses.

Unicorn has repaid a $125m, three-year syndicated

commodity murabaha facility, it said earlier on Thursday.

"We repaid this facility from internal sources and did not

resort to asset sales. We didn't want to resort to fire sales,"

Daredia said.

The facility, arranged by Raiffeisen Zentralbank Osterreich

AG (RZB) and Dubai Bank in 2008 , was due Jan. 27, Unicorn said.

The repayment reduced Unicorn's liabilities from more than

$600 million in 2009 to "minimal levels", a statement said.

Unicorn had assets of $974 million at end-March 2010.

Chief Executive Majid Al-Refai left Unicorn last August.

Sources told Reuters his departure was due to a dispute with its

board over strategy.

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