ADIB to hold EGM to vote on capital raising proposal

Abu Dhabi Islamic Bank (ADIB) will hold an extraordinary general meeting (EGM) on 21^st June to vote on a proposal to raise capital through a rights issue to support the bank’s continued growth as well as to vote on a proposal to increase the bank’s programme for issuing sharia-compliant tier 1 capital instruments.

The proposed rights issue would raise AED 504 million in share capital, while the tier 1 capital instruments programme would increase to USD3 billion from the existing approved limit of USD2 billion.

“ADIB has experienced a period of strong expansion and we expect this growth trajectory to continue. In order to support our growth, the bank is looking to raise additional capital and as such we are now inviting our shareholders to participate in a rights issue,” said Tirad Al Mahmoud, ADIB’s Group Chief Executive Officer.

“We are also keeping our various capital instrument issuance programmes up to date, should an opportunity present itself in the future to raise alternative forms of capital,” he added.

“We are committed to maintain a solid capital base and to deliver the superior returns our shareholders and capital market investors have come to expect from ADIB, as a top tier financial institution. ADIB has a proven customer-centric strategy to build market-leading retail, private and wholesale banking businesses in the UAE, and we continue to explore select opportunities in other growth markets.”

ADIB reported 20.7 percent growth in net profit in 2014, with customer financing increasing 18.2 percent from the previous year.

The bank will continue to focus on expanding its retail network across the UAE and is to looking to further expand financing in the SME, large and emerging corporate segments, where demand for financing and ancillary services are rising as the UAE continues to diversify its economy.

The proposed issue of 168 million new shares, which will be fully underwritten, will be priced at AED 3 per share, which represents a 40 percent discount to the current share price and will increase ADIB’s share capital by AED 504 million.

Shareholders will receive the right to buy 56 rights for every 1000 shares they own. In addition, for the first time in the UAE, rights issued by a bank will be traded on the Abu Dhabi Securities Exchange through approved brokers. 

To pave the way for the rights issue, shareholders will be asked to vote on an amendment of ADIB’s Articles of Association to increase the bank’s authorised share capital from AED 3 billion to AED 4 billion. 

Under the tier 1 programme capital instruments programme, ADIB raised $1 billion in late 2012 through the world’s first ever Sharia-compliant hybrid tier 1 sukuk and the region’s first publicly issued perpetual tier 1 instrument. 

The EGM will take place at the Abu Dhabi Chamber of Commerce at 12pm on June 21^st. Should it fail to achieve a quorum of 75 percent of shares owned, a further meeting will be scheduled at the same venue on June 28^th. ADIB will set the timetable for the rights issue, including the ex-rights date and subscription period, following shareholder approval of the share offering.