Bahrain’s Gulf Finance House (GFH) has sold its 50 per cent stake in Bahrain Financial Harbour (BFH) to Emar Bahrain, a local investment company.

Proceeds from the deal will be used to repay debt on the company, which is selling off assets to reduce debt and is restructuring its business model to take account of the difficulty in continuing to place investments in new real estate schemes.

GFH’s report for 2008 states that the bank purchased a 49.88 per cent stake in BFH for $125m, which was valued in the 2009 annual report at $175m.

In February the bank’s chief executive, Ted Pretty, told MEED that he hoped to net about $420m from asset sales, that it would use to repay debt on its balance sheet that totalled around $450m.

The company, however, is significantly behind on the original plan with Pretty saying in February that he hoped to have completed $250m of asset sales by mid-March. The sale of the BFH is the first disposal that GFH has completed.

It is also in talks to sell off the Energy Cities projects in Qatar, Libya, India, and Kazakhstan.

Plans to sell off the bank’s 37 per cent stake in local Khaleeji Commercial Bank (KHCB) have been dropped.

In February the bank had been forced to restructure a $300m-loan, repaying $200m of it and delaying repayment on the remainder until August. In March it repaid $20m of a $100m-loan due that month and promised to repay $20m every six months for the next two years to clear the debt.