Bahrain: Listing of AUB preferred shares
An agreement was signed Saturday between BSE’s Director - Mr. Fouad Rashid and AUB’s Deputy Group Chief Executive Officer – Risk, Finance and Strategic Development - Mr. Sherif Abdallah to list the 1000 million non-cumulative partly convertible Class A preference shares issued on a pre-emptive rights basis by Ahli United Bank B.S.C. (AUB) at an Issue Price of US$ 0.45(net) per share (nominal value: US$ 0.25 per share) on the Bahrain Stock Exchange (BSE).
Mr. Fouad Rashid welcomed the Bank’s unique capital raising medium through a hybrid instrument following its earlier two very successful pre-emptive rights ordinary share Issues in July 2001 and December 2002 resulting in issue of additional 506 million and 800 million ordinary shares respectively and emphasisedemphasized the benefits companies will gain by considering the issuance of different capital raising instruments that might be used to support expansion plans and general funding requirements besides enhancing the investment opportunities to investors.
He also hoped that this listing would encourage other companies and financial institutions to issue and list tradable instruments, which would meet the companies’ requirements of finance and provide avenues for productive deployment of investors’ savings thereby contributing towards further developing the capital market in the Kingdom of Bahrain and increasing its competitiveness to attract local and regional investors.
Mr. Sherif Abdallah said that the listing of the preference shares is a remarkable event in the Bank’s history aiming to further re-inforce the Bank’s image among investors locally and regionally, following its earlier two very successful pre-emptive rights ordinary share Issues in July 2001 and December 2002 resulting in issue of additional 506 million and 800 million ordinary shares respectively..
He clarified that 50% of these preference shares will be mandatorily convertible on 1 January 2008 into equal number of ordinary shares of nominal value US$ 0.25 each at a price of US$ 0.45 per share. Following partial conversion to ordinary shares, the converted ordinary shares will be identified separately for trading purposes until the first Annual General Meeting of the AUB ordinary shareholders following conversion. The remaining 50% are redeemable in cash on 1January 2015 or at an earlier date after 1January 2010 at the Bank’s option if exercised, at US$ 0.45 per share.
Mr. Abdallah further added that prior to conversion, non-cumulative preferential annual dividends, if recommended by AUB’s Board of Directors and approved by the General Assembly of AUB ordinary shareholders will be set at the rate equal to 1.50% over twelve-month US Dollar LIBOR (prevailing at the beginning of each annual interval starting 1January 2005) on the issue price and payable annually.
He also stated that, following the conversion of the convertible Class A Preference Shares, the ordinary shares issued shall be entitled to receive the full year ordinary dividend, if declared, pari-passu with the other ordinary shareholders starting from the financial year ending 31 December 2008.