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BankMuscat Shareholders approve RO 238.3 million
(USD 619 mn) Dubai Group proposal to take
15%
stake in the Bank.
Muscat/Dubai. 22 September 2007: The
Shareholders of BankMuscat (SAOG) today approved
a proposal by the BankMuscat Board of Directors
to raise capital through private placement of
15% of its shares with Dubai Financial Group, a
Dubai Group company, for a total cost of RO
238.3 million (USD 619 mn). This is the single
largest cross border investment in the banking
sector in the region. Dubai Group is a member of
Dubai Holding.
This
proposed transaction has also received ‘in
principle’ approvals from regulatory authorities
in the Sultanate of Oman. The transaction is
subject to the final approval of the regulatory
authorities in the Sultanate of Oman.
Speaking on the occasion, Sheikh AbdulMalik bin
Abdullah Al Khalili, Chairman, BankMuscat SAOG
said:
“We are extremely glad that the proposal from
Dubai Financial Group has been so warmly
received by both the shareholders of the Bank
and the regulatory authorities in Oman. We
expect this relationship to greatly lend
momentum to our ambitious growth plans.
BankMuscat, as I am sure you are aware, has
periodically looked at innovative ways to raise
capital. This time is no exception. The offer
from Dubai Financial Group, we believe, will
provide the most significant value to our
stakeholders: not only in terms of the premiums
quoted, but also in terms of synergies in
cultural beliefs and the importance of long-term
value creation.”
Dubai Financial Group is the financial services
holding company for Dubai Group. Dubai Financial
Group’s strategy is to own global and regional
institutions for the long term and focuses on
aligning itself with the management to create
significant value for all stakeholders.
The highlights of the private placement are as
follows:
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BankMuscat
will issue 161.57mn ordinary equity shares to
Dubai Financial Group LLC through a private
placement as per Article 83 of the Commercial
Companies Law. This represents 15% of the
capital of BankMuscat post the private
placement.
-
The price
of a BankMuscat share that would be issued
under the above private placement would be RO
1.475 per share. The total consideration for
the private placement would be RO 238.3
million.
-
Dubai
Financial Group would nominate two directors
into the Board of BankMuscat subject to the
regulations of the Commercial Companies Law.
“This
private placement will result in a substantial
increase in the net worth of the Bank. We intend
to use these funds to support the overall asset
growth and expansion plans of the Bank both in
the domestic market and overseas. The funds will
also help us further strengthen our capital
adequacy position, which will go up to 18.87%,
from the current 11.4% levels,” Sheikh
AbdulMalik added.
The Central Bank of Oman currently requires
banks to maintain a capital adequacy ratio, the
ratio of a bank’s capital to its risk-weighted
credit exposure, to be no less than 10%.
BankMuscat has just announced a net profit of RO
40.2 million for the half year ended June 30,
2007, as against a net profit of RO 28.0 million
reported during the same period in 2006, thus
recording an impressive growth of 43.6%. This is
the second successive quarter that the Bank has
turned in a record performance. The basic
earnings per share on an annualized basis works
out to 88 baizas for every 100-baiza share of
the Bank.
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