First Gulf Bank to convert bonds worth AED3.6bn ($980.4m) into shares earlier than scheduled
Abu-Dhabi based First Gulf Bank
(FGB) is to convert bonds worth AED3.6bn ($980.4m) into shares earlier than scheduled, at a
valuation significantly higher than the current share price.
FGB, the UAE's second biggest bank by market
value, will list 125 million new shares on the Abu Dhabi bourse
on February 21 after converting bonds issued in July 2008 at a
price of AED28.80 per share, a statement said.
Shares in FGB ended 3.6 percent lower on Sunday, at AED17.10.
The bank's share capital will be adjusted to AED1.5bn
from AED1.38bn, the statement said.
"The board of directors and the management are confident of
the bank's rising profitability," said Andre Sayegh, chief
executive officer, in the statement.
"We are confident that as common shareholders, the
bondholders will benefit from their investment in the bank's
future growth over the years to come."
FGB issued the convertible bonds in 2008 to fund its growth.
The banking system in the UAE is trying to recover from a
sharp rise in provisioning and sluggish loan growth over the
past two years as the global financial crisis hit profitability.
Earlier this month, FGB reported a record full-year profit
of AED3.42bn but fourth-quarter net profit was
In January, FGB sold five-year bonds worth 200 million Swiss
francs ($211.8m) with a coupon of 3 percent after holding
off on a benchmark $500m bond citing volatile market
conditions, at the end of 2010.
($1=0.9443 Swiss franc)