The bank did not disclose how much debt would be converted, however 118.61 million new ordinary shares with a value of $0.8431 per share would be issued to IFC subject to regulatory approval.

Ahli United Bank, Bahrain’s largest lender, received a request from the International Finance Corporation (IFC) to convert subordinated debt to shares in the bank, it said in a statement on Sunday.

The bank did not disclose how much debt would be converted, however 118.61 million new ordinary shares with a value of $0.8431 per share would be issued to IFC subject to regulatory approval, the bourse filing said.

Ahli United’s shares were flat at $0.805 at 0840 GMT.

The number of shares being issued accounts for roughly two per cent of the bank’s current share capital, according to Reuters calculations.

After the conversion, the IFC’s stake in Ahli United Bank will reach 5.16 per cent, comprising a 2.29 per cent direct holding in the bank and a 2.87 per cent stake through its IFC Capitalization (Equity) Fund, the statement said.

Ahli United Bank and IFC signed a $200 million subordinated loan and conversion option agreement in November 2006.