Oct 17 2009
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Ithmaar to offer rights issue, launch Mandatory Convertible Sukuk
MANAMA, BAHRAIN 17/10/2009: Ithmaar Bank Chairman Khalid Abdulla-Janahi announced today (ed note: 17/10/09) that the Bank intends, as part of its capital-raising exercise, to offer a rights issue and launch a five-year Mandatory Convertible Sukuk, the Islamic equivalent of mandatory convertible bond issue.
J.P. Morgan is assisting Ithmaar Bank with its capital-raising plans for the Mandatory Convertible Sukuk.
Janahi also announced that an agreement in principle had been reached with Global Emerging Markets of New York (GEM), whereby GEM would commit to provide an equity line of credit amounting up to US$125 million which the Bank will have the option to draw down over a period of five years at prevailing average volume and market prices, resulting in issuance of new ordinary shares.
"We have received the Central Bank of Bahrain 's No Objection in respect of the Mandatory Convertible Sukuk," said Janahi. "As for the rights issue and equity line of credit, they will be subject to the approval of the regulatory authorities in the Kingdom of Bahrain. The benchmark size of the capital raising plans is between USD400 million and USD500 million. All the above will further strengthen our capital base and liquidity position," he said.
On Wednesday (ed note 14/10/09), Ithmaar Bank announced plans for a comprehensive reorganisation of the Bank with its wholly-owned subsidiary, Shamil Bank . The plans, which will see Ithmaar Bank emerging as a premier Islamic retail bank, involve both banks pooling their resources to create a single, more efficient and significantly stronger retail-focused Islamic bank, under the Ithmaar brand. This business model, to be adopted by the Bank, is part of its new Strategy. The reorganisation plan will further improve liquidity, lower the Bank's risk profile and enhance shareholder value by amplifying existing synergies. The reorganisation plan was announced following a meeting of the Ithmaar Board of Directors and the Central Bank of Bahrain 's No Objection (to the proposed reorganisation). The proposed reorganisation is still subject to shareholder and other regulatory approvals.
About Ithmaar Bank
Ithmaar Bank B.S.C.(stock code "ITHMR") is licensed by the Central Bank of Bahrain and listed on the Bahrain Stock Exchange and the Kuwait Stock Exchange.
It has a paid-up capital of US$598 million, total equity of US$1.1 billion and is a full service 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 and financial service 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 associates include Shamil Bank of Bahrain (headquartered in Bahrain), Ithmaar Development Company Limited, Faysal Bank Limited (Pakistan), Faisal Private Bank (Switzerland), Sakana Holistic Housing Solutions, Solidarity (an Islamic insurance company), BBK B.S.C., Bahrain based First Leasing Bank, and Ithraa Capital (Saudi Arabia).
For more information on Ithmaar Bank , please visit the Bank's website at www.ithmaarbank.com
About Shamil Bank
Shamil Bank is a Bahrain-based Islamic retail bank licensed and regulated by the Central Bank ofBahrain, with commercial and investment banking activities. It has grown steadily to become one of
Bahrain's leading financial institutions.
Shamil Bank provides a diverse range of products and services that cater to the financing and investment needs of individuals and institutions. Conducting its business in compliance with the principles of Sharia'a, it operates a network of local branches and maintains a presence in overseas markets through its subsidiaries, associated and affiliated companies.
Shamil Bank is a wholly owned subsidiary of Ithmaar Bank B.S.C., a full service investment bank.
About Ithmaar banking group
The Ithmaar banking group consists of Ithmaar Bank , Shamil Bank , Solidarity (an Islamic insurance company), Faisal Private Bank (Switzerland), Faysal Bank Limited (Pakistan), First Leasing Bank and Ithmaar Development Company. The group's services, including investment, private, retail, and commercial banking, private equity, mergers & acquisition advice, takaful, leasing, and real estate development, form a 360 degrees value chain that embraces the entire spectrum of banking and financial services.
© Press Release 2009
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