Burgan buys UGB Jordanian stakes
Manama, July 15, 2008
United Gulf Bank (UGB) has transferred its ownership in Jordan Kuwait Bank (JKB) to Burgan Bank after receiving the relevant regulatory approvals.
UGB and Burgan Bank are part of the Kipco Group and the transfer of JKB shares to Burgan is part of the group's restructuring of its financial services companies announced in March.
The JKB shares, representing a 43.86 per cent equity stake, were transferred at a price of JD7.27 ($10.25) per share and the transaction was executed on the Amman Stock Exchange.
UGB will make a profit before expenses of approximately $280 million on the transfer.
UGB will invest the proceeds of the transfer by acquiring up to 20pc of Burgan Bank's shares at a price around the market value of one Kuwaiti dinar ($3.75) per share. UGB currently owns approximately 0.7pc of Burgan Bank.
"By transferring our investment in JKB to Burgan Bank, UGB has realised the hidden value of the asset and, by reinvesting the proceeds into Burgan Bank, UGB is acquiring a premier investment grade listed asset which will provide growth and value to our shareholders," said UGB managing director Masaud Hayat.
"As one of the region's leading investment banks, it is astute business for UGB to re-invest in a business that we have helped to build," he said.
Meanwhile, Burgan Bank boosted second-quarter net profit by 6.3 per cent on lending and fee-based income. Net income in the first half stood at 46.9 million dinars, the lender said.