Gulf Finance House (GFH), a Bahrain-based company that offers Islamic investment banking products and services, is set to off load its 50% stake in Bahrain Financial Harbour Holding to Emar Bahrain.

GFH was badly hit by the regional property crunch, shrinking its balance sheet to about $1.3bn. Cash-strapped GFH is divesting its non-core assets, as the firm needs to raise funds to repay a $300m loan.

By entering a last minute deal with lenders to roll over $100m of its loan by six months, GFH narrowly avoided default in February 2010.

The current asset sale is aimed to allay investor fears of immediate liquidity concerns.

According to analysts, GFH has stake of approximately $175m in Bahrain Financial Harbour.

Emar Bahrain already owns about 50% in Bahrain Financial Harbour.