Gulf Finance House announces merger and acquisition plans (By IFN)

BAHRAIN: Shariah compliant investment bank Gulf Finance House (GFH), whose unit GFH Capital is speculated to be in a takeover bid for UK side Leeds United Football Club, announced to the Bahrain and Dubai bourses on the 3rd September 2012 that it is currently exercising due diligence for the potential acquisition of asset management and real estate development companies. In addition to its assessment of various acquisition opportunities, GFH said that: “The bank is looking to enhance shareholder value and strengthen its balance sheet. To achieve this, we are looking to increase the stake in its group companies, subject to obtaining all relevant regulatory approvals.” Apart from GFH Capital, GFH’s other associates include Khaleeji Commercial Bank, in which it owns 40%, Jordan’s Al Barakah Takaful, Balexco (Bahrain Aluminium Extrusion Company) and Cemena Holding Company, a cement-focused business in Bahrain. GFH also clarified that GFH Capital, which successfully won a bid to acquire Turkey’s Adabank last year, is currently awaiting regulatory approval from the Turkish authorities for the acquisition. In relation to another GFH Capital venture, its flagship Injazat Technology Fund, GFH said that the firm is in talks with potential partners to launch the Injazat Technology Fund 2, following the close of the first fund. The investment bank’s merger and acquisition (M&A) plans follow its recent measures taken to restructure around US$210 million-worth of debt; as part of a larger effort to regain its footing in the aftermath of the 2008/2009 financial crisis. In July this year, it announced the restructuring of US$100 million outstanding from a syndicated Wakalah facility, after in May disclosing the restructuring of US$110 million outstanding from a US$200 million Sukuk sold in July 2007. It has also strived to improve its financials; reporting a profit of US$4.74 million in the second quarter of 2012, against a loss of US$11.26 million a year earlier, on the back of higher income and lower expenses. With the bank having strengthened its balance sheet, its M&A plans appear to signal that it is ready to return to growth.