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EBG to acquire 10pc stake in Bahrain bank

EBG's initial investment of $100 million (Dh367 million) is already committed through participation in a $425 million private placement through invitation.

ABG which has an authorised capital of $1.5 billion will raise $1 billion from the market through a combination of a private placement and a public issue. Adnan Ahmed Yousif, Chief Executive of ABG told Khaleej Times yesterday that the group has completed the private placement with participation from leading business groups across the Middle East.

“Emirates Bank Group is the only banking company that has participated in the private placement. Their significant stake in our group will mark the beginning of a new strategic relationship between the two groups across all the countries where both the groups have presence,” said Yousif.

ABG's $580 million public issue opened for subscription yesterday across the region. The Group is offering 188.9 million shares at a subscription price of $3.08 (about Dh11.03) per share with a face value of $1. The price includes an issue fee of $0.05 per share. The IPO is open for subscription by all nationalities until June 15.

The IPO would be the biggest launched by an Islamic bank in the region. Emirates Bank Group is participating in both public issue and private placement. EBG expects to have more than 10 per cent stake with director board representation in the Bahrain based Group.

“After our public issue EBG will be the single largest shareholder in the company and their participation will add to our regional reach,” Yousif said.

EBG which has its own Islamic Bank is hoping to expand into wider Middle East, Subcontinent and Far East through Al Baraka's network. “Our expansion strategy includes organic growth and expansion through strategic alliances and partnerships. We see a good opportunity in expanding our reach in some of the most lucrative markets in the region and outside through ABG's network,” said Jamal bin Ghalaita, General Manager, Emirates Bank.

ABG has reserved as much as 20 per cent of the shares to small investors while the remaining 80 per cent will be allocated to major investors. The bank expects a possible twofold oversubscription. The shares will be listed simultaneously on the Bahrain Stock Exchange and the Dubai International Financial Exchange. He ruled out any negative impact on the IPO from the current downward trend in the regional stock markets.