JEDDAH, 27 December 2004 — Gulf Finance House B.S.C. (GFH), one of the leading Islamic investment banks in the region, yesterday announced its private equity exit from the International Franchise Capital Ltd. (IFC). During GFH’s three-year holding period in IFC, it was successful in earning a cumulative return of 50 percent for its clients.
GFH sold the 79.93 percent stake in IFC to the reputed Bahrain-based Jawad Business Group (JBG). The sale agreement was signed in Manama yesterday by Esam Janahi, chief executive officer of GFH, and Faisal Jawad, chairman and chief executive officer of JBG, in the presence of senior members of the GFH investment team and representatives from IFC and JBG.
Detailing the strategy underlying the divestment, Janahi said: “GFH has always endeavored to pursue a strategy which is primarily aimed at investment opportunities that provide high yields to investors in an increasingly value-driven business environment.
“Our successful exit from IFC after the three-year investment period reflects GFH’s flexibility, dynamism and innovation as a leading Islamic investment bank, as well as our commitment to maximize returns to investors in our various investment vehicles.”
Established in the last quarter of 2001 to acquire a controlling stake in a company engaged in franchise restaurants and car rental businesses, IFC has in its portfolio well known international hospitality and service-led brands.
Emphasizing IFC’s performance over the past three years, Janahi added: “The performance of IFC has been commendable given the fact that it was operating in a fiercely competitive market and against the backdrop of challenging market conditions in general.
“During this period, GFH adopted various strategies to build IFC’s portfolio of brands. These included continuous monitoring, selective expansion, changes in management, and judicious asset sales.”
The exit from IFC comes at a time when GFH is promoting substantial, landmark real estate projects in Bahrain and other parts of the region. These include the landmark $1.3 billion Bahrain Financial Harbor development, and the $600 million Al Areen Desert Spa & Resort project, both of which are in Bahrain; as well as the recently announced $3.8 billion theme park development — Legends — in Dubai.
Janahi said: “The exit from IFC will build confidence among our shareholders and investors in our track record and strengthen our investment value proposition for the various visionary projects that we are embarking on.”
Terming the acquisition as a strategic move, Jawad said: “The acquisition of the 79.93 percent stake in IFC is a logical extension of JBG’s core business and represents a major expansion for the group. The move will bring premium brands to the JBG stable, adding depth to its existing portfolio. We are confident that our association with IFC will result in better business prospects for the company, thereby providing greater value to our shareholders.”
Established five years ago, GFH has a paid-up capital of $135 million and authorized capital of $300 million. It is committed to the Islamic Shariah philosophy of wealth management and this directs its innovation and shapes the structure of its investment products. GFH’s investment portfolio includes major projects such as Bahrain Financial Harbor, Al Areen Desert Spa and Resort, Legends in Dubai, Lebanon’s Arab Finance House, Solidarity — Takaful life assurance, annuity savings, and short-term insurance; Bahrain’s Royal University for Women and menaJet — low-cost airline for the region.
