Arcapita files for bankruptcy protection

Bahrain investment vehicle Arcapita has filed for bankruptcy protection in the US after failing to reach a $1.1 billion deal with creditors.

Bahrain: Arcapita's base

According to a report on ALB’s The Brief magazine, Arcapita is putting the blame squarely on non-bank creditors. Chief executive Atif Abdulmalik said: ‘The actions of certain non-bank creditors have precluded Arcapita from reaching such a consensual resolution before the March 28th maturity date, jeopardising Arcapita’s ability to satisfy its fiduciary duties to its stakeholders.’

Investment cycle

The Washington Post reports that Arcapita is hoping that US chapter 11 protection will allow the company to restructure its balance sheet and provide time for reorganisation.
Arcaptia confirmed that none of the companies it owns is included in the filing. Officials said the company had sufficient funds to be able to continue operating and will only sell off assets ‘at the appropriate point in the investment cycle’.

Fading value

The company has had to face up to the fading value of its holdings, and has been forced to sell fast-food chain Church’s Chicken as well as its stake in the second most popular American coffeehouse operator, Caribou Coffee.
Arcapita claims to manage approximately $7.4bn worth of investments, including real estate holdings and several companies across the globe.

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