Bahrain’s Gulf Finance House (GFH) is on track to complete the sale of two of investments that could net the company around $250m by mid-March.

The bank’s acting chief executive officer, Ted Pretty, says proceeds from the disposals will be used to repay debt as part of GFH’s attempts to clean up its balance sheet.

The first sale is believed to be part of the bank’s 37 per cent stake in the local Khaleeji Commercial Bank, valued at about $130m, and the other is a property asset.

GFH has about $450m debt, and has identified about $420m worth of assets to sell to reduce debts. “We want to exit all the assets we have identified for sale by the end of the year,” says Pretty.

A number of other deals could quickly follow the two sales planned in March.

“We have a buyer that we are in final stages of negotiation with for the Energy Cities projects in Libya, India and Qatar,” says Pretty. “The buyer is a government institution, so they have the capital to ensure the completion of the projects.”

GFH is also in talks with a separate buyer for the Energy City Kazakhstan project, according to Pretty.

The Bahraini bank has already sold part of its stake in Qatari investment bank QInvest for $50m.

Earlier this month, GFH secured a deal with 32 lenders giving it an extra six months to pay the final $100m of a $300m loan which had been due to be repaid on 10 February. The bank is also in talks with a group of four Islamic banks to extend another $100m loan, $50m of which is due in March.

Pretty says he is also embarking on an aggressive cost-cutting strategy at the bank. “Expenses are running at about $11m a month,” he says. “My objective is to get that down to about $6.5m a month.”

The cuts are likely to result in job losses. Staffing levels at the bank peaked at 270 in 2008, but have since dropped to 207 by the end of 2009. Pretty says “there will be a significant [further] reduction” in staffing levels.

“We will concentrate on senior expatriate positions to reduce costs and some natural attrition in the Bahraini workforce.”

In 2009, GFH made a loss of $728m as a result of booking $656m of provisions because of the fall in value of its assets. Pretty says the bank should return to profitability in the third or fourth quarter.