Ahli United to issue $125m shares to IFC
Manama, April 3, 2011
Ahli United Bank, Bahrain's largest bank, said on Sunday it will raise $125 million by issuing 500 million preferential shares to the International Financing Corporation (IFC).
IFC, a unit of the World Bank, can convert the shares into ordinary shares over the next four years, AUB said in a statement to Bahrain's stock exchange.
The preferential share issue is to boost the bank's tier 2 capital, a measure of a bank's financial strength. AUB also said it would also borrow a subordinated loan worth $165 million from IFC.
Banks in the Gulf region have sought to prop up their balance sheets in recent months raising fresh capital or issuing bonds.
AUB also said it had agreed with IFC to extend the duration of an existing $200 million tier-II convertible subordinated loan issued by IFC by two years to 2018.
The World Bank's IFC has financed AUB's regional expansion to boost regional capital markets, and it also plans to invest in AUB's Iraqi unit, the Commercial Bank of Iraq (CBIQ). -Reuters