North Africa/Middle East

When liquidators closed the books on the Bank of Credit and Commerce International case in May, a 21-year-old scandal that shook the global financial system and ensnared arms dealers, dictators and even the CIA appeared to be over. Earlier this month, however, creditors of the failed bank got the go-ahead from a judge in Luxembourg to partially reopen the case and make one last attempt to collect $326 million from Saudi Arabia, The Wall Street Journal Middle East Real Time blog reported.

Iran's national gas company said it is facing collapse, the latest sign of deepening economic distress from international sanctions as Tehran seeks urgent relief in talks with world powers, The Wall Street Journal reported. The chief executive officer of state-owned National Iranian Gas Company, Hamid Reza Araghi, said over the weekend that the company has declared bankruptcy, according to the semiofficial Mehr news agency. The report said the company had a debt of 100 trillion rials, or about $4 billion. The company tried to backtrack on the comments Monday.

New caps on mortgage lending will soon come into force in the United Arab Emirates, part of a long-running effort by the country’s central bank to keep real estate markets in check and avoid a debt-fueled bubble. And not everybody’s happy, The Wall Street Journal Middle East Real Time blog reported. While the limits apply to all of the U.A.E.’s banks, they’re seen as largely aimed at Dubai, where a recent Standard Chartered report estimated apartment prices went up by about 38% year-on-year in October.

Citigroup and International Bank of Qatar are holding up negotiations to restructure $4.5 billion in debt of Abu Dhabi conglomerate Al Jaber Group, further complicating drawn-out talks, sources said, Gulf Daily News reported. Al Jaber is one of the most prominent private sector firms in Abu Dhabi, which has generally suffered fewer corporate problems than neighbouring Dubai since the financial crisis. With operations in construction, aviation and retail, Al Jaber set up a five-bank creditor committee in 2011 to negotiate a restructuring.

Arcapita, a private equity and investment company based in Bahrain, has emerged from bankruptcy protection in the U.S. this week, concluding a reorganization that analysts say may represent the first true post-financial-crisis debt restructuring by an Arab Gulf company, The Wall Street Journal Middle East Real Time blog reported. The bankruptcy plan approved by a U.S. court envisions Arcapita selling down its portfolio of assets over five years to repay creditors, and then effectively going out of business.

Kuwait's Global Investment House said on Wednesday that it had completed a $1.7 billion restructuring plan, the second at the firm since the global financial crisis, Reuters reported. Under the plan, Global separated its core fee business from other parts of the company which were spun off into special purpose vehicles (SPV). Global was one of several Kuwaiti investment firms hit hard by the crisis. It used short-term debt to invest heavily in local real estate and stocks whose values later slumped. Global created two SPVs under the plan.

Banks in the United Arab Emirates are seeking five years to comply with a central bank regulation to limit their exposure to government entities in the second-biggest Arab economy, Bloomberg News reported yesterday. The banks are also seeking to exclude marketable bonds and sukuks from the proposal, according to the U.A.E. Banks Federation. The central bank said in April 2012 that banks must not lend more than 100 percent of their capital to local governments and the same amount to government-related entities to help reduce risk, and must comply with the new regulations by Sept. 30, 2012.

Indebted Israeli conglomerate IDB Holding will present a new proposal for a debt restructuring to a Tel Aviv court on Sunday after it confirmed that Argentinian businessman Eduardo Elsztain has backed out of a planned investment of $75 million, Reuters reported. Elsztain's investment had been crucial to a previous debt restructuring that IDB, which controls some of Israel's leading companies, had presented to its bondholders. An industry source had told Reuters on Friday that Elsztain had decided not to go ahead with the investment.

Dubai, which teetered on the brink of default in 2009, is accelerating asset sales as more than $30 billion of debt repayments come due next year, Bloomberg reported. Dubai Financial Group yesterday agreed to sell its stake in consumer lender Dubai First to First Gulf Bank PJSC for 601 million dirhams ($163 million). Dubai Holding LLC plans to sell its 35 percent stake in Tunisie Telecom, the country’s ministry for information and communication technologies, said June 21.

A U.S. judge Tuesday approved Arcapita Bank B.S.C.'s plan to gradually liquidate itself in a process that conforms with Islamic Shariah law, which generally prohibits borrowing money with interest, The Wall Street Journal reported. The Bahrain investment firm entered bankruptcy protection last year with a goal of restructuring itself but ended up with a plan to orderly liquidate its private-equity investments.