By James Bennett
Leading Dubai mortgage company doubles foreign ownership quota to attract institutional investors.
Mortgage lender Tamweel is to permit foreigners to own up to 40% of the company in order to expand its investor base.
Tamweel's board decided to increase foreign ownership of its share capital from 21% to 40% at its Extraordinary General Meeting (EGM) on April 7, however, no timescale as to when the change, aimed at attracting more institutional investors, has been revealed.
The assembly also approved the issuance of AED 1.1 billion (US$300m) of convertible sukuk and AED1.83 billion (US$500m) of non-convertible sukuk.
Sheikh Khaled bin Zayed bin Saqer Al-Nehayan, chairman of Tamweel, said that he and his board members made the move in response to "extremely strong demand".
"We are raising the cap on foreign ownership in Tamweel's share capital to the maximum allowable by law. This move will allow the company to broaden its foreign investor base, especially among institutional investors that believe Tamweel shares to be a valuable growth stock." Tamweel's share price, however, has dropped 11.4% so far this year.
"The approval of the issuance of sukuk worth US$800m will allow Tamweel to offer an even wider range of products and services to its clients across the UAE and wider region.
"These issues will assist the company to capture market share, multiply revenues and derive value for shareholders through increased returns that maximise their wealth. We believe that together, these two moves will create an even more solid foundation for the future growth of the company," he added.