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DIB meeting okays 100% acquisition of Tamweel
Abdul Basit / 5 March 2013
Dubai Islamic Bank, or DIB, has confirmed the 100 per cent acquisition of Islamic housing finance provider Tamweel and said it will unlock new opportunities for both entities.
The bank is the majority shareholder in Tamweel with 58.2 per cent of issued equity. Monday’s extraordinary general assembly meeting voted in favour of DIB’s formal offer to acquire the remaining 41.8 per cent of the issued shares in Tamweel it does not currently own.
“We believe that the home finance market is set to grow over the next few years. The 100 per cent acquisition of Tamweel by DIB will not only support the recovery and growth of the sector, but also create strong synergies for both businesses,” DIB Chairman Mohammed Ibrahim Al Shaibani said in a statement.
In January this year, the bank announced its plan to acquire 100 shares of Tamweel and offered 10 new DIB shares for 18 existing Tamweel shares held. The fair value of each share for DIB and Tamweel underlying the intended swap is set at Dh2.25 and Dh1.25, respectively.
Both parties will benefit from the move and the bank will be able to combine the mortgage portfolio at one place after 100 per cent acquisition, DIB deputy chief executive officer Dr Adnan Chilwan told Khaleej Times in January.
“This move reflects DIB’s commitment to supporting the UAE economy in general and the resurgent home finance sector in particular. We believe this offer is in the best interests of the shareholders, customers and stakeholders of both DIB and Tamweel,” Dr Chilwan said last month.
Dr Nasser Saidi, former chief economist at the Dubai International Financial Centre, also supported the deal and said: “DIB’s takeover of Tamweel would certainly revitalise the UAE’s real estate market, given DIB’s past experience in the field, and is likely to contribute towards the re-emergence of a stronger mortgage sector.”
After the closing of the share swap offer, DIB intends to apply to the Securities and Commodities Authority of the UAE for the delisting of Tamweel shares from the Dubai Financial Market.
The bank’s assembly also approved DIB’s proposal to issue new shares by way of a capital increase of the bank’s issued share capital in accordance with the Commercial Companies Law. The new DIB shares will be issued to the shareholders of Tamweel who will accept to transfer their shares in Tamweel.
Furthermore, the meeting also approved the issuance of non-convertible Shariah-compliant Hybrid Tier 1 and Tier 2 capital instruments to raise the bank’s Tier 1 and Tier 2 capital and strengthen its capital adequacy ratio.
The assembly meeting has approved the distribution of a 15 per cent cash dividend for the year 2012. DIB reported a net profit of Dh1.19 billion, compared to Dh1.05 billion in 2011, showing an increase of 13 per cent.
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