Adib shareholders agree to EIIC stake
AL EMARAT AL YOUM STAFF
The extraordinary general meeting of the Abu Dhabi Islamic Bank (Adib) yesterday approved a proposal to issue Dh1.5 billion worth of Islamic bonds that are convertible into shares to Emirates International Investment Company (EIIC).
The conversion price was set at Dh40 per share, a premium of Dh30. The bonds will be converted into 37.5 million shares with a nominal value of Dh375 million plus a premium, or issue bonus, of Dh1.125bn. Adib’s paid-up capital will increase by 25 per cent to Dh1.875bn.
After the conversion, EIIC will have a shareholding of more than 50 per cent. The meeting agreed that the new shares will be added to the capital after a period yet to be defined. The bonds will provide zero return over that period.
EIIC Chairman Joaan Uwaidhah Al Khaili said the infusion of funds will provide Adib with a strong platform to enter regional and world markets. He added that EIIC will keep the shares it obtains from the conversion off the stock exchange for up to five years to protect the share price.
Haven't checked them but I assume this is related to the EIIC convertible sukuk. Although the second one may be related to ADIB 2006 financial results.
GN reports from Bloomberg that ADIB received shareholder approval to issue AED 2 billion ($545m) worth of bonds but the value will be cut to AED 1.5 bn if the issue doesn't meet Ministry of Economy approval.
I can't find the article online on Bloomberg or GN but here's a summary...
Terms of sale were not given in the ADSM statement according to Bloomberg.
EIIC is a unit of National Holdings based in Abu Dhabi and has a 37% stake in ADIB. Abu Dhabi's ruling family owns another 29% and ADIA (Abu Dhabi Investment Authority) owns 10% says BB (based on information from Zawya).
ADIB share price went limit up today. Seems odd since this news was already known on Thursday when the share price fell? Perhaps EIIC hadn't agreed to the new terms until today?
Reuters 02 Mar 2007 wrote:
ADIB accepts sweetened takeover bid
Abu Dhabi Islamic Bank’s (ADIB) directors have accepted an improved offer from a firm owned by the emirate’s ruling family, which wants to take a majority stake in the lender by buying convertible bonds.
The board, asked by shareholders to negotiate better terms with Emirates International Investment Co, said the bonds would convert into shares at Dh42.5 ($11.57), Dh2.5 more than the suitor had offered.
Shares of Abu Dhabi Islamic, the ninth largest in the United Arab Emirates by market value, fell 1.17 per cent to Dh46.10 on Thursday. The stock hit a 52-week high of Dh98 in June on talk of a takeover bid, which Emirates International announced in September.
The bank, will increase the size of the Islamic bond to Dh2bn from the Dh1.5bn planned, the lender said in a statement to the regulator. The board also decided to raise the size of the bond to be sold to Emirates International Investment Co to Dh2bn from Dh1.5bn, the statement sent to the Emirates Securities and Commodities Authority on Thursday said.
“It was agreed between the management of the bank and Emirates International Investment Co that the bank issue bonds worth Dh2bn and the conversion rate to be Dh42.5,” it said.
Emirates International, which controls a stake of around 37 per cent wanted the bonds to convert at Dh40 per share, bank chairman, Mohammed bin Humooda bin Ali, said last week after a meeting of shareholders. Other shareholders wanted Dh45 per share and had asked the board to negotiate better terms, he said.
The bond will be converted into shares no later than March next year and the board will decide exactly when it will happen, a spokesman for the bank said. Emirates International stake in the bank will increase to nearly 52 per cent, he said.
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