The plan represents the most effective way to implement a comprehensive restructuring of Arcapita and “maximise recoveries” to creditors and other stakeholders, according to CEO Atif Abdulmalik. The firm has some $7.4bn of assets under management.
In March last year, the firm filed voluntary cases under Chapter 11 with the goal of developing and confirming a plan of reorganisation. Plans to refinance a $1.1bn financing facility were negatively impacted by the eurozone crisis, and the firm was unable to extend the facility.
The provisions allow the filing companies to continue to operate their businesses and manage their properties under the direction and control of their boards and management.
Abdulmalik said, “During the exclusivity period provided by Chapter 11, we worked tirelessly with our advisors, our key creditors, including members of the Official Committee of Unsecured Creditors and of an ad hoc group of creditors, and their advisors to submit a plan of reorganisation that maximises recoveries from Arcapita’s assets.
“Based on extensive feedback from these creditors, the creditor distributions implemented by the plan broadly reflect the economic splits agreed between the creditors. We are committed to confirming the plan and exiting Chapter 11 as quickly as possible.”
The provisions of Chapter 11 allow the filing companies to continue to operate their businesses and manage their properties under the direction and control of their Boards and management. Thus, until emergence, Arcapita’s management team will continue to conduct business in the ordinary course.
With offices in Atlanta, London and Singapore, Arcapita invests in private equity, real estate, infrastructure and venture capital.
According to the Wall Street Journal, the reorganisation includes a new $550m Islamic bond, and potential $185m Sharia-compliant exit facility.
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