Emirates NBD To Raise Capital, Increase Foreign Ownership Limit

Dubai: Emirates NBD said on Sunday it plans to increase capital by Dh1.8 billion to Dh7.35 billion through issuance of new shares ahead of a potential acquisition in Turkey, along with an increase in the foreign ownership limit.

The bank, which is majority owned by Investment Corporation of Dubai, said in a statement posted on Dubai Financial Market’s website that it is seeking shareholders’ approval to issue new shares at a 10 per cent discount to the market price at the relevant time.

The current shareholders will have “priority to subscribe to new shares in proportion of their respective holding at the relevant time,” the bank statement said. The notice did not state the use of proceeds for the increase in equity.

The bank earlier said that it was in initial discussions with Russia’s state-owned Sberbank to buy its wholly-owned subsidiary Denizbank in Turkey.

The bank also needs shareholders’ approval, for which it plans to hold a general meeting on March 27, of a $12.5 billion (Dh45.8 billion) medium term note programme, $1 billion structured note programme, along with 1.5 billion Australian dollars debt issuance. The bank has upcoming maturities of Dh13.3 billion in 2019, and Dh5.9 billion this year.

Stock jumps

The bank also wants to a shareholder’s approval to increase the foreign ownership to 20 per cent from the earlier 5 per cent.

“It is the foreign ownership limit news that is pushing up the stock price and not so much the capital increase bit. The increase is 15 per cent and that’s a lot and that is the driver of the stock,” Sanyalaksna Manibhandu, head of research, First Abu Dhabi Bank Securities told Gulf News.

Emirates NBD shares jumped 13.64 per cent to Dh10, the highest level since August 2015. Traded volume jumped to 18 million shares, the highest since 2014.