Bahrain's Arcapita sells stakes in UK retirement homes

Arcapita Bank has sold its interests in five retirement homes outside London, as the Bahraini investment bank liquidates assets to raise money for its creditors.

Arcapita and its investors sold the 80 per cent ownership in the property to Health Care REIT, a publicly traded property investment trust in the United States, it said in a statement. It invested in the property in 2003 through a joint venture with Sunrise Senior Living, the statement added.

Arcapita, which manages property and other investments that it says are Sharia-compliant, had assets of US$3.06 billion (Dh11.24bn) and liabilities of $2.5bn when it sought Chapter 11 protection on March 19, 2011.

Since then, it has been mired in legal proceedings with creditors in New York. In November, Arcapita secured court approval for a $125 million bankruptcy Islamic loan from Fortress Investment Group to allow the Manama bank to shop for financing with better terms.

Arcapita is among several investment banks in the region that were hit hard by the 2008 global financial crisis as the value on their assets collapsed and frozen debt markets prevented them from raising new loans.

Two other Bahraini lenders have faced liquidity challenges in the wake of the crisis.

Awal Bank filed for bankruptcy in 2010, while Gulf Finance House restructured more than $200m in debt.

"It is a continuation of the consolidation process and cleaning up the mess," said Tariq Qaqish, the deputy head of asset management at Al Mal Capital in Dubai. "It's going to take a while - not easy."

In Kuwait, Global Investment House and Investment Dar are among the high-profile defaults that shook confidence in the Arabian Gulf oil-state economy when they sought to renegotiate payments for a collective $6.73bn of debt in 2009.