Highly commended Middle Eastern deal of the year 2013: Arcapita
|Arcapita Chapter 11 $2.7 billion restructuring|
|Financial advisers||Rothschild and Alvarez & Marsal (restructuring adviser)|
|return to the Deals of the Year 2013 index|
Chapter 11 bankruptcy is never a cheering experience, but in Arcapita’s case it has created an important precedent for the Middle East, where – even after the crises of 2008 and 2009 – restructurings have been extensions of loans, largely because of undeveloped local bankruptcy laws.
"Chapter 11 was a challenging experience, but one that has enabled us to deliver a solution in the best interests of our investors, creditors and other stakeholders," said Atif Abdulmalik, Arcapita’s chief executive, in a statement following the firm’s emergence from Chapter 11 reorganization proceedings in the US.
Arcapita, a Shariah-compliant alternative investments firm headquartered in Bahrain and operating in north America, Europe, the Gulf region and Asia, filed for Chapter 11 bankruptcy in 2012, after the global downturn hampered its ability to make sales, do new business and refinance debt.
In 2013, courts in the Cayman Islands (on May 31) and then in the US (on June 11) approved a plan of reorganization, allowing credit recoveries based on a gradual wind-down of Arcapita’s investments, rather than a fire sale.