x Abu Dhabi, UAESunday 23 July 2017

Emirates Islamic Bank to seek Dh1.5bn in offering

Emirates Islamic Bank prepares for a rights issue, seeking to raise Dh1.5bn from investors after its integration with Dubai Bank is completed.

Emirates Islamic Bank is preparing a cash call to investors, seeking to raise Dh1.5 billion (US$408 million) as it combines operations with the lender Dubai Bank.

The Islamic lenderexpects to begin the rights issue on January 25 and will run until February 3, it said in a filing to the Dubai Financial Market on Wednesday.

The bank's capital will be raised to Dh3.93bn through the offering of 1.5 billion shares - more than doubling the total float - at Dh1 each.

The bank's shares were unchanged in trading yesterday at Dh1.27 each.

"The public offering will be available to the bank's shareholders whose names appear in the shares records dated on 15/01/2012," the bank said in a statement. "The offer is available to the bank's shareholders at a rate of 0.61717 for every share they own."

Emirates Islamic Bank became the country's third-largest Islamic lender last year after it was merged with Dubai Bank at the end of November.

Dubai Bank was rescued by the emirate's Government in May 2011.

Emirates NBD was then forced to acquire the Islamic lender for a purchase price of just Dh10 in October of that year, following a clean-up of its balance sheet by the Ministry of Finance.

Emirates Islamic Bank joins Dubai Islamic Bank in seeking to raise capital from existing investors via a rights issue.

The UAE's biggest Islamic lender said last week that the call was intended to raise capital as it took control of Tamweel, the Islamic mortgage lender, increasing its stake from 58.2 per cent to 100 per cent.

Tamweel will be delisted from the DFM as part of the deal.

On Wednesday, Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, set out a course to refashion the emirate as a capital of Islamic industries, including Sharia finance, dispute resolution and halal food production.