Bankmuscat Regs Regulatory News (BKM)

14 Aug 2007 09:51

BankMuscat (S.A.O.G)11 August 2007 BankMuscat Board approves RO 238.3 mn (USD 619 mn) Dubai Group proposal to take 15% stake Single largest financial services cross border investment in the region Muscat/Dubai, 12 August, 2007: The Board of Directors of BankMuscat (SAOG) hasapproved a proposal to raise capital through private placement of 15% of itsshares with Dubai Financial Group, a Dubai Group company, for a total cost of RO 238.3mn (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 is subject to necessary approvals from the regulatoryauthorities and the shareholders of the Bank. The shareholders will be invitedto Extraordinary General Meeting to discuss and approve the proposed privateplacement. The deal is expected to be completed before the end of this year. Speaking on the occasion, Sheikh AbdulMalik bin Abdullah Al Khalili, Chairman,BankMuscat SAOG said: "To lend further momentum to our ambitious growth plans,BankMuscat has periodically looked at innovative ways to raise capital. Thistime is no exception. We have considered the various options open to us andfound the private placement route to be the most suitable. We found the offerfrom Dubai Financial Group to be the most rewarding for stakeholders: not onlyin terms of the premiums quoted, but also in terms of synergies in culturalbeliefs and the importance of long-term value creation. "Dubai today is in many ways the torchbearer of the Middle East in terms of therapid strides it has taken toward integration with the global economy. Thispartnership will allow us to marry the tradition, culture and strong economicroots of Oman borne out of the visionary leadership of His Majesty Sultan Qaboosbin Said, with the business prowess of Dubai." Dubai Financial Group is the financial services holding company for Dubai Group.Dubai Financial Group's strategy is to participate in global and regionalinstitutions for the long term and focuses on aligning itself with themanagement to create significant value for all stakeholders. Mohammed Al Gergawi, Executive Chairman, Dubai Holding commented on thesignificance of the deal: "We are very pleased with this investment as it is animportant step in cementing the strategic economic partnership between UAE andOman. This comes at the right time as both the Dubai and Oman economiesdiversify rapidly and gain momentum in terms of growth and opportunities." He added: "Since its inception, Dubai Holding has worked to adopt initiativesand projects that will contribute to and strengthen economic relations betweenthe United Arab Emirates and all countries in the region, through partnershipsand strategic investments in several sectors. This is the second investmentproject for Dubai Holding in the Sultanate of Oman. The beginning of ourcooperation with the Sultanate was through Sama Dubai, a member of Dubai Holdingthat specializes in real estate development, which in 2005 launched a multi-usereal estate project in the Yiti region. We are currently examining thepossibilities of future investment projects in the Sultanate." Commenting on their decision to invest in BankMuscat, Soud Ba'alawy, ExecutiveChairman, Dubai Group said: "Dubai Financial Group has always believed infollowing a 'value-added approach' to its investments. This includes identifyingcompanies where we believe have a strong long-term growth potential and where wecan add substantial value as a partner. "We believe BankMuscat is at an extremely interesting point in its growth curve,with the domestic Omani economy rapidly diversifying and gaining momentum interms of growth. We believe in the strength of the management at BankMuscat andwill work with them to grow rapidly in the region." The highlights of the private placement are as follows: • BankMuscat will issue 161.57mn ordinary equity shares to Dubai Financial GroupLLC through a private placement as per Article 83 of the Commercial CompaniesLaw. 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 privateplacement would be RO 1.475 per share. The total consideration for the privateplacement would be RO 238.3 mn (USD 619 mn) • Dubai Financial Group would nominate two directors into the Board of BankMuscat subject to the regulations of the Commercial Companies Law • The private placement would be subject to the parties entering into asubscription agreement and to approval of the Central Bank of Oman, CapitalMarket Authority and the shareholders of BankMuscat in an EGM. "This private placement will result in a substantial increase in the net worthof the Bank. We intend to use these funds to support the overall asset growthand expansion plans of the Bank both in the domestic market and overseas. Thefunds will also help us further strengthen our capital adequacy position, whichwill 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 adequacyratio, the ratio of a bank's capital to its risk-weighted credit exposure, to beno less than 10%. BankMuscat has just announced a net profit of RO 40.2 mn (USD 104.4mn) for thehalf year ended June 30, 2007, as against a net profit of RO 28.0 mn (USD 72.7mn) 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 annualised basis, which works out to 88 baizas for every 100 baiza share of the Bank. Though subject to regulatory approvals, the transaction is expected to becomplete before the end of 2007. About BankMuscat (SAOG) With assets worth over US $ 8.5 billion, BankMuscat (SAOG) is the largest bankin Oman today with a strong presence in Corporate Banking, Retail Banking,Investment Banking, Treasury, Private Banking and Asset Management. The Bankhas a network of 100 branches and over 230 ATMs in Oman, a branch in Riyadh,Saudi Arabia, and a representative office in Dubai (UAE). BankMuscat also has astrategic stake in Centurion Bank of Punjab, a private sector bank in India andBankMuscat International (BMI) an independent Banking entity that will befocused on becoming a truly GCC regional bank. The Bank has also recently acquired a 43% stake in the Mangal Keshav Group, one of the oldest and most respected securities houses in the fast-growing Indian equities market. For further information: Sukanti Ghosh, Head - Corporate Communications BankMuscat SAOGPh: + 968 99261325Fax: + 968 24787768 E-mail: sukantig@bankmuscat.com Suha Al Raisi, Assistant Manager, Corporate CommunicationsBankMuscat SAOGPh: + 968 24768595Fax: + 968 24787768E-mail: suhaa@bankmuscat.com About Dubai Financial Group Dubai Financial Group (DFG) is the financial holding company for Dubai Group, amember of Dubai Holding. Its core practice is the identification and acquisitionof financial services companies, to build long-term value through state-of-the-art governance. Identifying opportunities across the banking, foreign exchange,brokerage and asset management sectors, DFG will reinforce the Group's positionas the principal entity mandated to drive its activities in the regional andinternational markets. It has significant stakes in regional and globalinstitutions such as Marfin Popular Bank, Thomas Cook India, Taib Bank and DubaiBank. For further information on Dubai Group, please contact: Natasha Sterling JiWinTel: +971 4 3613887 Mob: +971 50 252 8014 Fax: +971 4 3888001 Email: natasha.sterling@1lwin.ae Official Disclosure of the Proposed Private Placement Transaction Muscat, August 12, 2007: The Board of Directors of BankMuscat (SAOG), thenation's premier bank, has approved a proposal to raise capital through privateplacement of shares with Dubai Financial LLC. This proposed transaction issubject to necessary approvals from the regulatory authorities and theshareholders of the Bank. The details of the proposed private placement are as follows: 1. Bank Muscat (BM) will issue 161.57 million ordinary equity shares to Dubai Financial LLC (DF), the global financial investor arm of Dubai Holding, through a private placement as per Article 83 of the Commercial Companies Law. This represents 15% of the capital of BM post the private placement. 2. The price of a BM 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. 3. DF would nominate two directors into the Board of BM subject to the regulations of the Commercial Companies Law. 4. The private placement would be subject to approval of the Central Bank of Oman, Capital Market Authority and the shareholders of BM in an EGM. 5. The timeline for the private placement would be subject to regulatory approvals with the transaction expected to be completed before the end of 2007. About BankMuscat (SAOG) With assets worth over US $ 8.5 billion, BankMuscat (SAOG) is the largest bankin Oman today with a strong presence in Corporate Banking, Retail Banking,Investment Banking, Treasury, Private Banking and Asset Management. The Bankhas a network of 100 branches and over 250 ATMs in Oman, a branch in Riyadh,Saudi Arabia, and a representative office in Dubai (UAE). BankMuscat also has astrategic stake in Centurion Bank of Punjab, a private sector bank in India andBankMuscat International (BMI) an independent Banking entity that will befocused on becoming a truly GCC regional bank. About Dubai Financial Group Dubai Financial Group (DFG) is the financial holding company for Dubai Group, amember of Dubai Holding. Its core practice is the identification and acquisitionof financial services companies, to build long-term value through state-of-the-art governance. Identifying opportunities across the banking, foreign exchange,brokerage and asset management sectors, DFG will reinforce the Group's positionas the principal entity mandated to drive Its activities in the regional andinternational markets. It has significant stakes in regional and globalInstitutions such as Martin Popular Bank, Thomas Cook India, Taib Bank and DubaiBank. This information is provided by RNS The company news service from the London Stock Exchange