DUBAI, May 19 (Reuters) - Bahrain-based Gulf Finance House expects to complete a proposed capital reduction by the end of the second quarter, the Islamic investment firm said in a bourse statement on Monday.
Under the proposal, which still requires regulatory approval, GFH will reduce the nominal value of its shares by 13.8 percent to $0.265 per share from $0.3075. As a result, paid-up capital will be cut to $837 million from $972 million.
The cash reduction would not involve any cash transfer and would not change the bank’s net equity, the statement said. However, under accountancy rules, it will help to remove accumulated losses from GFH’s balance sheet.
GFH suffered heavily in the wake of the global financial crisis, requiring multiple debt restructurings, as it struggled to cope with a slowdown in its main advisory business and the debt it had taken on during the boom years.
The capital reduction was first announced by GFH in March, with plans also calling for a convertible sukuk worth up to $500 million to be sold to help restructure current liabilities, develop projects and fund possible future acquisitions. (Reporting by Bernardo Vizcaino; Editing by David French)