Leading Kuwaiti bank Burgan has launched a rights issue of up to KD50 million ($161.4 million) as part of efforts to boost its capital position and enhance financial flexibility to support its strategic priorities.

These include strengthening its Kuwait business, reallocating assets and accelerating digital transformation. The subscription period began on August 31, the bank said.

The issue comprises 277.78 million new ordinary shares priced at 180 fils each, consisting of a nominal value of 100 fils and a share premium of 80 fils.

Eligible shareholders are entitled to subscribe for about 7.10% of their existing holdings. A shareholder holding 1,000 shares, for example, would be entitled to subscribe for 71 new shares, said the Kuwaiti bank in its statement.

Each pre-emption right entitles its holder to subscribe for one new share during the relevant subscription period. Eligible investors may also apply for additional shares, subject to availability and the allocation mechanism outlined in the prospectus.

If fully subscribed, the issue will increase the bank’s issued and paid-up capital by about 27.78 million dinars, while generating a share premium of about 22.22 million dinars, for total proceeds of up to 50 million dinars.

The offering is being managed by Kamco Invest, the investment arm of Burgan Bank, as issuance adviser and subscription agent.

Capital to support strategy

Burgan Bank said the additional capital would support investment in its core Kuwait franchise, asset reallocation and digital transformation.

The bank said its strategy includes directing capital towards businesses offering attractive risk-adjusted returns while seeking to improve the efficiency and sustainability of its balance sheet.

It also plans to continue investing in its digital capabilities to improve its operating model, customer experience and digitally enabled banking services.

Announcing the plan, Burgan Bank Chairman Sheikh Abdullah Nasser Al Sabah said the rights issue would give eligible shareholders an opportunity to maintain their ownership participation while supporting the bank’s next phase of development.

The Pre-emption Right Subscription Period will close on September 14. The trading period runs from August 31 to September 7.

“We have structured the rights issue to give eligible shareholders the opportunity to maintain their participation in the Bank’s ownership and contribute to its next phase of development,” he stated.

Sustainable long-term value 

“We view this step as an important foundation for the Bank’s future, underpinned by a clear vision for creating sustainable long-term value for shareholders, while maintaining the highest standards of governance and discipline in capital management,” he added.

Group CEO Tony Daher said: “This capital increase is a proactive step that will enable us to execute our strategy from a position of financial strength. It provides us with additional capacity to invest in our core business, advance our strategic priorities and selectively pursue opportunities that support sustainable, long-term growth.”

"Our focus remains on disciplined growth and prudent risk management. We will continue to allocate capital toward areas where we see the greatest potential to strengthen our franchise, enhance our customer proposition and create lasting value for our shareholders," he added.