Qatar's Doha Bank to launch $426m local rights issue

First phase two two-part capital increase will be issued on February 28, says lender
Qatar's Doha Bank to launch $426m local rights issue
By Reuters
Thu 21 Feb 2013 12:28 PM

Qatar's Doha Bank will launch the first phase of a two-part capital increase, a QAR1.55bn (US$425.7m) rights issue to local investors, on February 28, the lender said on Thursday.

Capital levels at Qatar's fifth-largest bank by market value are lower than its Qatari peers and proceeds from the issue are expected to be used mainly to plug that shortfall.

The issue, which is equivalent to 50 percent of its total shares, will be split equally between a local offering and global depositary receipts (GDRs) in London.

The first stage will be an offering of 51.7m new shares to current stockholders which will begin on February 28 and run until March 13, Doha Bank said in statement after shareholders approved the move.

Shares are being offered at QAR30 each, a significant discount to the current market price of QAR51.1 at 0710 GMT. The stock was down 9.9 percent on Thursday after going ex-rights.

The second part, the London GDR offering, will follow the local offering, although timing is subject to receiving the necessary regulatory approvals, the statement said.

GDRs will be priced at a minimum of 90 percent of the market share price on the date of issue, it added.

JP Morgan will act as lead manager for the GDR issue, the bank's CEO Raghavan Seetharaman said last month.

An October research note from Arqaam Capital said that Doha Bank's core Tier 1 capital level would fall to 9.6 percent by the end of 2013 without a capital increase.

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