U.S hedge fund Davidson Kempner Capital Management is part of the creditor committee for the $1.1 billion debt restructuring at Bahrain investment house Arcapita, the first time a fund has fulfilled such a role in the Gulf Arab region.
Previous restructurings in the region, like Dubai World's $25 billion debt deal, have been bank-only affairs, leading to long extensions as banks, concerned with provisioning, opaque legal remedies and maintaining relationships with local borrowers, adopted a conciliatory attitude.
The presence of the distressed debt investment firm on the committee, confirmed by three sources close to the matter, is expected to change the dynamic of negotiations, with the fund having the potential to drive a much harder bargain.
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