26 June 2005
MUSCAT -- National Bank of Oman (NBO) is just a step away from becoming the first bank in Oman with the largest AGCC shareholding after its shareholders approved a 12.5 per cent equity private placement to the Commercial Bank of Qatar (CBQ).
The terms of the transaction, which has already secured the requisite regulatory approvals, entails the placement of 10,000,000 shares, at a price of RO4.450 per share, amounting to RO 44.5 million to CBQ, one of the leading banks in Qatar.
At an extraordinary general meeting (EGM) yesterday evening at Grand Hyatt, the shareholders of NBO approved this placement to CBQ which will now hold 12.5 per cent of the enlarged share capital.
CBQ has also proposed to buy shares of around 17.92 million from other NBO shareholders to help make its total stake in NBO to reach 27.92 million shares or 34.9 per cent, subject to the regulatory approvals. The total investment by CBQ for this is expected to be around RO124.24 million.
Once this investment is complete, then NBO will be the first bank in Oman with the largest AGCC shareholding.
At present, the 34.5 per cent Suhail Bahwan Group Holding-owned NBO's capital comprises 70 million shares. Upon completion of these arrangements, the NBO's issued and paid-up share capital will increase from RO70 million to RO80 million. The subscription agreement to conclude the transaction was signed in Muscat on May 31 and the placement is scheduled to close soon.
Subject to CBQ acquiring the 10 million shares, it will enter into a management services agreement with NBO for the provision of management services as set out in the agreement against the payment of a specified management fee. This agreement will be for a period of three years subject to annual renewals with the approval of the NBO shareholders.
The management fee payable to CBQ will be calculated as follows.
In respect of NBO's net profit going up to RO15 million, CBQ shall be entitled to receive the lower of management costs or 1 per cent of the net profit.
If the net profit of NBO is between RO15-30 million, CBQ will receive the higher of management costs or 1 per cent of the net profit.
In case, NBO's net profits are more than RO30 million, then CBQ is entitled to higher of the management costs in addition to 3 per cent of the net profit.
As and when CBQ acquires 34.9 per cent stake in NBO, then it will entitled to have four members on the board of directors, sources said.
Speaking at the EGM, Sheikh Suhail Bahwan said he is happy that the shareholders have approved the deal and it is a good step in the right direction. He said this private placement is in the best interest of the bank and will help it expand its existing business in a profitable manner and provide sustained returns to its shareholders.
NBO was set up in 1973 and is today one of the largest banks in Oman. This equity private placement provides NBO with a number of benefits, which include further enhancing its financial health, allowing synergy in operations for higher productivity and allowing NBO to renew its focus on profitable business development accompanied by dynamic remedial management.
NBO recently invested significantly to upgrade customer-facing technologies and enhance its branch network.
The Commercial Bank of Qatar (CBQ) was established in 1975 as the first private sector bank in Qatar. With a long-term deposit rating of A3 from Moody's, the international credit rating agency, CBQ sustained track record of profitable operations for 30 years has been supported by diversified revenue structure, good assets quality, diversified funding sources and strong capital base.
MUSCAT -- National Bank of Oman (NBO) is just a step away from becoming the first bank in Oman with the largest AGCC shareholding after its shareholders approved a 12.5 per cent equity private placement to the Commercial Bank of Qatar (CBQ).
The terms of the transaction, which has already secured the requisite regulatory approvals, entails the placement of 10,000,000 shares, at a price of RO4.450 per share, amounting to RO 44.5 million to CBQ, one of the leading banks in Qatar.
At an extraordinary general meeting (EGM) yesterday evening at Grand Hyatt, the shareholders of NBO approved this placement to CBQ which will now hold 12.5 per cent of the enlarged share capital.
CBQ has also proposed to buy shares of around 17.92 million from other NBO shareholders to help make its total stake in NBO to reach 27.92 million shares or 34.9 per cent, subject to the regulatory approvals. The total investment by CBQ for this is expected to be around RO124.24 million.
Once this investment is complete, then NBO will be the first bank in Oman with the largest AGCC shareholding.
At present, the 34.5 per cent Suhail Bahwan Group Holding-owned NBO's capital comprises 70 million shares. Upon completion of these arrangements, the NBO's issued and paid-up share capital will increase from RO70 million to RO80 million. The subscription agreement to conclude the transaction was signed in Muscat on May 31 and the placement is scheduled to close soon.
Subject to CBQ acquiring the 10 million shares, it will enter into a management services agreement with NBO for the provision of management services as set out in the agreement against the payment of a specified management fee. This agreement will be for a period of three years subject to annual renewals with the approval of the NBO shareholders.
The management fee payable to CBQ will be calculated as follows.
In respect of NBO's net profit going up to RO15 million, CBQ shall be entitled to receive the lower of management costs or 1 per cent of the net profit.
If the net profit of NBO is between RO15-30 million, CBQ will receive the higher of management costs or 1 per cent of the net profit.
In case, NBO's net profits are more than RO30 million, then CBQ is entitled to higher of the management costs in addition to 3 per cent of the net profit.
As and when CBQ acquires 34.9 per cent stake in NBO, then it will entitled to have four members on the board of directors, sources said.
Speaking at the EGM, Sheikh Suhail Bahwan said he is happy that the shareholders have approved the deal and it is a good step in the right direction. He said this private placement is in the best interest of the bank and will help it expand its existing business in a profitable manner and provide sustained returns to its shareholders.
NBO was set up in 1973 and is today one of the largest banks in Oman. This equity private placement provides NBO with a number of benefits, which include further enhancing its financial health, allowing synergy in operations for higher productivity and allowing NBO to renew its focus on profitable business development accompanied by dynamic remedial management.
NBO recently invested significantly to upgrade customer-facing technologies and enhance its branch network.
The Commercial Bank of Qatar (CBQ) was established in 1975 as the first private sector bank in Qatar. With a long-term deposit rating of A3 from Moody's, the international credit rating agency, CBQ sustained track record of profitable operations for 30 years has been supported by diversified revenue structure, good assets quality, diversified funding sources and strong capital base.
Visvas Paul D. Karra
© Times of Oman 2005
