Arcapita became the first Gulf Arab firm to file for Chapter 11 in the US on Monday, under pressure from hedge funds which demanded full repayment ahead of the maturity of a $1.1 billion Islamic finance facility on March 28.
With multiple Gulf debt restructurings in the works – including some which have dragged on for more than two years – other debtors could use the framework provided by the legal code as a way to settle their own debt issues.
“Surely this means others will proceed to use it,” said a source involved in the Arcapita restructuring. “It’s an example of the maturity of the local market that a company is looking to use this process.”
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