Reuters
Dubai
Burgan Bank will open subscription for a 102.6mn dinars ($352.5mn) rights issue next Sunday as it looks to fund growth plans and boost its capital base to meet upcoming regulatory changes.
The price of shares under the rights issue, which will run from November 16 until December 14, will be 0.475 dinars each, a statement from the bank - Kuwait’s third-largest lender by assets - said yesterday.
This would be a 10.4% discount to the current share price, according to Reuters calculations. Shares in Burgan Bank closed at 0.530 dinars yesterday.
The capital increase will see 216mn new shares issued, with the subsequent increase to paid-up capital worth 21.6mn dinars, it said.
Burgan’s rights issue will be available to existing shareholders as of November 13 on a proportional basis, while the excess will be available for general subscription, Burgan said.
“Burgan Bank aims with its capital optimisation plan at adjusting its capital base to comply with Basel III and to further support growth plans,” Majed Essa Al Ajeel, Burgan’s chairman said in a statement yesterday.
The lender’s chief executive, Eduardo Eguren, said earlier this year the bank would need to raise its capital by 20%-30% to meet the Basel III global banking industry regulations.
Burgan has already enhanced its capital base once this year. In September, it completed a $500mn bond which boosted its Tier 1 - or core - capital ratio.