Emirates NBD Bank launches strategic rights issue to raise up to AED 6.450 billion
The new shares will be issued at an issue price of AED 8.50 per/share, reflecting the nominal value of AED 1.00 per/share and a share premium of AED 7.50. This represents a discount of 35.36 percent to the price of each of Emirates NBD's shares on the Dubai Financial Market (DFM) at the close of business on 16 October 2019.
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 31 October 2019, including any dividends to be approved and paid in respect of Emirates NBD's financial year ending 31 December 2019.
The terms and launch of the Rights Issue were approved by the Board of Directors of Emirates NBD on 15 October 2019, following the approval of the Rights Issue at Emirates NBD's General Assembly meeting held on 20 February 2019. The Rights Issue has also been approved by the UAE Security and Commodities Authority and the UAE Central Bank.
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 percent to 20 per cent on Monday, 2 September 2019 and announced its intention to increase its FOL to 40 percent 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 to registered shareholders of Emirates NBD as at the close of business of the DFM on Wednesday, 16 October 2019 in the amount of 1 Right for every 8 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 on 29 October 2019, to allow for the settlement of trades on the DFM.
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 Sunday, 3 November 2019 and ending on Thursday, 14 November 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".
Emirates NBD Capital has been appointed as Lead Manager and Bookrunner in respect of the Rights Issue. Emirates NBD Capital, Citigroup Global Markets Limited and Morgan Stanley & Co. International plc are advising Emirates NBD regarding structuring, sizing and pricing of the Rights Issue.
Emirates NBD has appointed itself as the Sole Receiving Bank. Clifford Chance LLP and Matouk Bassiouny & Ibrahim have been appointed as International Legal Adviser and UAE Legal Adviser, respectively.