Finance & Capital Market

ENBD launches rights issue to raise $1.75bn

Emirates NBD (ENBD) Bank, a leading bank in the UAE, said that it proposes to increase its issued share capital by issuing new shares in its share capital to raise up to Dh6.45 billion ($1.75 billion) by way of a rights issue.

The new shares will be issued at an issue price of Dh8.50 per new share, reflecting the nominal value of Dh1.00 per new share and a share premium of Dh7.50 per new share. This represents a discount of 35.36 per cent to the price of each of Emirates NBD's shares on the Dubai Financial Market (DFM) at the close of business on October 16.

The New Shares will rank pari passu with Emirates NBD's existing shares including the right to receive all future dividends and other distributions declared, made or paid after October 31, 2019, including any dividends to be approved and paid in respect of Emirates NBD's financial year ending 31 December 2019.

Emirates NBD intends to use the net proceeds raised from the Rights Issue to strengthen its capital base and to support future growth of the business of Emirates NBD.

Emirates NBD increased its foreign ownership limit (FOL) from 5 per cent to 20 per cent on September 2, 2019 and announced its intention to increase its FOL to 40 per cent in the future, and will seek necessary approvals from its shareholder and the relevant regulatory authorities at the appropriate time.

The rights issue will be conducted through the issue of tradable securities pursuant to the Decree of the UAE Securities and Commodities Authority’s Chairman of the Board No. 11RM of 2016 to registered shareholders of Emirates NBD as at the close of business of the DFM on October 16, 2019 in the amount of one right for every eight shares held on such date.

In order to receive rights on 31 October 2019, investors must ensure that they execute any purchase orders for shares at least two days prior to 31 October 2019, i.e. on or before 2:00 p.m. (UAE time) on 29 October 2019, to allow for the settlement of trades on the DFM (which operates on a T+2 basis).

Shareholders of Emirates NBD will be entitled to trade their rights on the DFM, whether to sell some or all of their rights or to buy additional rights, commencing on November 3, 2019 and ending on November 14, 2019.

The holders of Rights, which includes shareholders of Emirates NBD and any persons who purchased rights during the Rights Trading Period, will be entitled to exercise their Rights to subscribe for new shares at the issue price commencing on Sunday, 10 November 2019 and ending on Wednesday, 20 November 2019.

The new shares will be allocated to eligible persons on Monday, 25 November 2019. Refunds will be given to eligible persons, who did not receive the number of New Shares that they subscribed for, on or around Saturday, 30 November 2019.

Hesham Abdulla Al Qassim, vice chairman and managing director of Emirates NBD said: "This milestone announcement is testament to our long-term commitment to our shareholders and the UAE investor community. We are pleased to offer our valued and loyal shareholders an exceptional opportunity to participate in our continued growth and success as we remain key partners to the growth agenda and vision of our nation’s esteemed leadership.” – TradeArabia News Service