DUBAI: Arcapita Bank, a Bahrain-based investment firm, said Monday it filed for US bankruptcy protection under Chapter 11 after failing to refinance $1.1 billion of debt maturing on March 28.
The firm, whose capital is mostly held by Gulf investors said, the step was the "most effective way" to protect its business and assets and implement a comprehensive restructuring.
The decision was taken "after plans to refinance a $1.1 billion (837 million euros) financing facility coming due on March 28th 2012 were negatively impacted by the Eurozone crisis," chief executive officer Atif Abdulmalik said.
He said Arcapita tried to extend the facility by three years, but the "actions of certain non-bank creditors have precluded Arcapita from reaching ... a consensual resolution" before the deadline.
He said the filings by Arcapita and several of its affiliates under Chapter 11 "offer Arcapita the necessary protection it needs to complete productive negotiations with all parties."
None of the bank's subsidiaries and portfolio companies are included in the filing, the statement said.
Arcapita will continue to manage approximately $7.4 billion of assets and will engage in discussions with its creditors and other stakeholders to "develop an acceptable plan of reorganisation which allows the company to emerge as an even stronger and more viable entity."
Chapter 11 of the US Bankruptcy Code allows a company to continue operating its business and managing its assets in the ordinary course of business.
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