MANAMA/ZURICH – Cash reserves at the Bahraini issuer of the $190 million Villamar sukuk slumped in 2009, just days the after company said it would seek to delist the sukuk from the bourse.
Cash reserves at Residential South Real Estate Development Co plunged to 5.45 million Bahraini dinars ($14.5 million) at the end of 2009 from 42.3 million a year earlier, increasing concerns that the company could face a cash crunch.
Regional investors spooked by the Dubai debt crisis were further shaken this month when Kuwait’s International Investment group defaulted on a $200 million sukuk, or Islamic bond.
The request to delist Villamar from the Dubai exchange had already raised concerns that the issuer might be seeking to renegotiate future payments while avoiding regulatory disclosure requirements.
The delisting would come as a blow to investors in the Bahrain Financial Harbour development, which includes Villamar.
Villamar bought land from Bahrain Financial Harbour development which is half owned by Gulf Finance House, a group which itself made headlines earlier this year when it narrowly escaped default.