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Ithmaar Bank leads consortium to launch the region's first fully integrated infrastructure and real estate development company in the Middle East - NASEEJ

MANAMA, BAHRAIN - Ithmaar Bank , a Bahrain- based investment bank with global reach, has successfully led a consortium of regional institutional investors to launch Naseej , with an authorized capital of BD 2 billion and paid-up capital of BHD300 million, fully integrated infrastructure and real estate development company that will service the entire value chain of the real estate and construction industry. As the first fully integrated infrastructure and real estate development company in the Middle East, Naseej is set to usher in an era of change for the region's construction sector which is set to reap the benefits arising from the company's economies of scale. Naseej is planned to carry out the following activities:

· Development and construction services
· Manufacturing and importing building materials
· Facility management services
· Mortgage services
· Real estate planning & consultancy services
· Marketing services

Founding Shareholders

Ithmaar Bank successfully led a consortium of nine regional institutions that constitute Naseej 's founding shareholders. Sixty per cent of Naseej 's initial paid-up capital will be contributed by the company's founding shareholders: Social Insurance Organisation, (the merged entity of the Pension Fund Commission and General Organisation of Social Insurances ), Al Safat Investment Company , BBK , (Kuwait), Eskan Bank , Palm Capital SPC, Venture Capital Bank , Global Investment House , (Kuwait), Shamil Bank and Ithmaar Development Company .

The shareholders will raise the remaining forty per cent of Naseej 's capital through an initial public offering (IPO) that will be listed on the Bahrain Stock Exchange later this year. Shares will be set at 100 Bahraini fils per ordinary share. The government of Bahrain Cabinet has approved the IPO a couple of weeks ago.

An Era of Change: Naseej 's Services

"The launch of Naseej is an important milestone in Bahrain's economic progression and is representative of the successful collaboration between varied private sector institutions, working in tandem to address a growing socio-economic issue. Bahrain's construction industry has been plagued by constraints and skill shortages for far too long which has caused delays to several mega-developments and hindered the growth of the economy. Naseej was born out of our collective desire to eliminate these constraints and accelerate the development of our nation through the creation of a fully integrated, real estate development company that would manage the entire spectrum of the construction and real estate business, from the initial planning stages, to manufacture of building materials, financing, and marketing advisory services for developments," said Khalid Abdulla-Janahi, Chairman, Ithmaar Bank .

Benefiting the local community

" Naseej 's services will include: construction and development, manufacturing & importing building materials, facility management services, real estate consultancy, mortgage services and marketing advisory services. But the most important characteristic of NASEEJ is that it has been created to provide a solution to the housing problems of the people of this country. This will be attained by putting all the know-how and the resources of the founding shareholders of NASEEJ to provide a range of services that were not readily available to the average Bahraini before. The company will initially focus on the Bahrain market but plans to expand its footprint to other Gulf countries and beyond within the next few years", he added.

"Reports show that recent crises in the market have demonstrated that the Kingdom of Bahrain has not had the ability to aggressively drive the booming real estate and construction industry. The nation's over dependence on imports to fulfill the demand for essential building materials has held it back and prevented the timely completion of several housing and infrastructure projects that are key to enhancing Bahrain's progress," he said.

Last week HH the Prime Minister, Shaikh Khalifa bin Salman Al Khalifa met with government officials to review the situation saying "The government is deeply concerned about setbacks that hamper the commercial sector and affect development projects".

"With the launch of Naseej we are confident the local community will have access to the resources and expertise necessary to continue Bahrain's long term growth and development. The creation of such an extraordinary entity such as NASEEJ is a further reiteration of our commitment to the community and our desire to assist in building the nation. Furthermore, Ithmaar Bank and Naseej 's institutional founding shareholders have made the decision not to take a premium on the company's shares when launching the IPO," continued Janahi.

"Our foremost intention with launching the region's first fully integrated infrastructure and real estate development company, is to provide a boost to the local construction and real estate industry. Through ensuring price stability and competitiveness we will also go a long way towards guaranteeing affordable housing solutions to all sections of the Bahraini community who will benefit immensely from Naseej 's large scale and holistic solutions," concluded Janahi.

Plans for Naseej 's Capital Increase

Naseej 's impending IPO has been approved by the Government authorities. Upon the launch of the IPO, only receiving banks will accept a fee; Ithmaar Bank and its founding shareholders will forgo their premium on the shares.

Ithmaar Bank 's Chairman, Khalid Abdulla-Janahi, stated, "Our long term vision is to expand Naseej 's presence within the Middle East region and beyond in the near future and to that end we plan to substantially augment the company's paid-up capital. The initial paid-up capital of Naseej is BHD 300 million."

A Holistic Solution

According to recent statistics, real estate developments exceeds $2 trillion are planned or under way in the GCC, with less than one quarter of the projects already awarded. The Kingdom of Bahrain alone has approximately $7.5 billion in projects already on site or under construction, with an estimated further $18.5 billion projects on the way. Current forecasts predict that the demand for real estate developments will continue to rise well into 2010. The boom in the real estate sector has caused a resulting surge in the demand for raw materials with the price of cement increasing almost 50 per cent in the last three years.

On his part, H.E. Sheikh Ebrahim Bin Khalifa Al Khalifa, Minister of Housing and Chairman of Eskan Bank , said that the rapid increase in oil revenues together with the liberalization of real estate markets have together pushed the demand in the real estate market up to levels higher than those of the supply of construction materials and skilled labor force. The result has been disability of contractors to timely implement construction projects.

H.E. Sheikh Ebrahim Bin Khalifa Al Khalifa, the Minister of Housing and Chairman of Eskan Bank referred also to the fact that Bahrain has all along been importing building materials, and therefore exposed to fluctuations in the supply of these materials. To minimize attendant risks, it has been decided to establish " Naseej ", which will ensure the supply of these materials on a regular basis and at competitive prices. The end result will, hopefully, be timely implementation of development projects.

- Ends -

About Ithmaar Bank :
Ithmaar Bank B.S.C. is licensed by the Central Bank of Bahrain and listed on the Bahrain Stock Exchange and the Kuwait Stock Exchange (ITHMR). It has a paid-up capital of $543.6 million, total equity of $1.3 billion and is a full investment bank with its direct business covering the Middle East and North Africa (MENA) region, as well as South Asia, Asia-Pacific and Europe. Besides holding significant investments in the banking, financial services and real estate sectors in different markets, the main direct activities of the Bank include underwriting (equity and other financings), private equity (structuring, participation and portfolio management), Islamic financing and advisory services covering project financing, investments, capital markets and mergers & acquisitions.

Ithmaar Bank 's flagship subsidiaries and affiliates include Shamil Bank of Bahrain, Solidarity (an Islamic insurance company, headquartered in Bahrain), Faisal Private Bank (Switzerland), Faysal Bank Limited (Pakistan), First Leasing Bank and Ithmaar Development Company .

For more information on Ithmaar Bank , please visit the Bank's website at www.ithmaarbank.com

For more information please contact:
Luis Maronese
Director
PR and Corporate Communications
Ithmaar Banking Group
Tel: +973 36242224

© Press Release 2008