'This was essential for the survival of BIB,' says one of its creditors. 'The rights issue buys some time and brings a little comfort, but it doesn't resolve the issue.' Details of the timing and pricing of the expected $30 million-50 million issue are yet to be announced.

BIB will move ahead with its plans for restructuring under new leadership. Robin McIlvenny, BIB's long-standing chief executive, has tendered his resignation. In the short term, an interim management committee headed by the bank's chairman, Faisal al-Marzook, will replace him.

'The next step is for a second standstill agreement to be put in place,' says a creditor. 'The last agreement expired on 16 December. It is still in the interests of creditors to support attempts to restructure, but attention is beginning to focus on the BMA [Bahrain Monetary Agency - central bank]. If it does nothing, the creditors will start fighting over the scraps pretty quickly. If it steps in as a lender of last resort, or offers other meaningful support, then there could be a way for the financial restructuring to work.'

It is understood that, earlier in the year, the BMA offered a $40 million loan to support BIB's cash-flow (MEED 27:9:02). However, creditors were unimpressed by its preferred status. Said one: 'This is of no real help to us. We would like to see greater support from the BMA.'