Oman Arab Bank (OAB) will raise the RO10mn it needs for its Islamic banking operations through a rights issue, with the bank's proposed initial public offer (IPO) expected to take place in the second half of 2012, according to Abdul Kader Askalan, chief executive officer.
The board of directors of Ominvest, which owns a 51 per cent stake in OAB, recently approved the proposed increase in OAB's share capital by way of a rights issue, the money from which will be set apart for Islamic banking operations. Ominvest's contribution to OAB's fresh capital requirements would be RO5.1mn.
The rights issue is being held in order to comply with the stipulated RO10mn minimum capital requirement to launch Islamic banking services.
Speaking to Muscat Daily, Askalan said that the bank is going through the legal procedures for its IPO, which will involve a share sale of 25 per cent and needed cabinet approval as it is below the mandatory 40 per cent.
He said, "It is not expected in the first half of this year. It includes long procedures to meet CBO and CMA requirements.
"We are yet to hold due diligence and evaluate the pricing of the IPO. It is expected to come out towards the second half of this year."
Askalan said, "We are working on the legal procedure of the rights issue which will be announced at an appropriate time. We are still awaiting CBO's final regulations on Islamic banking without which we cannot proceed."
© Muscat Daily 2012
