Bahrain-based Arab Banking Corporation (ABC) plans to increase its share capital by $500 million through a rights issue.

ABC's board of directors, at a meeting held prior to a general assembly yesterday, called for an extraordinary general meeting on April 29 to approve the proposed increase in the authorised capital of the bank from $1.5 billion to $2 billion with a proposal to increase the issued capital from $1 billion to $1.5 billion by way of a pre-emptive rights offering to existing shareholders.

ABC's consolidated accounts for last year were ratified at the general assembly meeting.

It recorded a net profit of $125 million last year compared to $202 million in the previous year. The operating results for last year were adversely impacted by the US subprime crisis.

The board also resolved to issue a subordinated debt of $500 million next month which will be subscribed by the three principal shareholders of ABC.

The proceeds raised by way of this subordinated debt will be used subsequently for subscribing to the rights offering. -TradeArabia News Service