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: UAE FreeZone Newsletter - Issue 41 -
August 2007 |
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Dubai group to buy 15pc stake in BankMuscat
BankMuscat has agreed to sell 15 per cent of its shares to Dubai Financial Group, a member of Dubai Holding, for Dh2.27 billion ($619 million).
The private placement represents the largest cross-border investment in the banking sector in the region.
The proposed transaction, which is subject to the necessary approvals from the regulatory authorities, including the Central Bank of Oman, the Capital Market Authority, and the bank's shareholders, is expected to complete before the end of the year.
Under the terms of the private placement BankMuscat will issue 161.57 million ordinary equity shares to Dubai Financial through a private placement as per Article 83 of the Commercial Companies Law. They would be issued at RO1.475 per share. Dubai Financial will also nominate two directors on to the BankMuscat board.
Of the deal, BankMuscat chairman, Shaikh Abdul Malik bin Abdullah Al Khalili said: 'We have considered the various options open to us and found the private placement route to be the most suitable. We found the offer from Dubai Financial Group to be the most rewarding for stakeholders, not only in terms of the premiums quoted, but also in terms of synergies in cultural beliefs and the importance of long-term value creation.
'Dubai today is in many ways the torchbearer of the Middle East in terms of the rapid strides it has taken towards integration with the global economy. This partnership will allow us to marry the tradition, culture and strong economic roots of Oman borne out of the visionary leadership of His Majesty Sultan Qaboos bin Said, with the business prowess of Dubai.'
He also added: 'This private placement will result in a substantial increase in the net worth of the bank. We intend to use these funds to support the overall asset growth and expansion plans of the bank both in the domestic market and overseas. The funds will also help us further strengthen our capital adequacy position, which will go up to 18.87 per cent, from the current 11.4 per cent level.'
Dubai Holding's executive chairman, Mohammed Al Gergawi, commented: 'We are very pleased with this investment as it is an important step in cementing the strategic economic partnership between UAE and Oman. This comes at the right time as both the Dubai and Oman economies diversify rapidly and gain momentum in terms of growth and opportunities.'
This is the second investment project for Dubai Holding in Oman, said Al Gergawi, the first being through Sama Dubai, a real estate developer, which launched a multi-use real estate project in the Yiti region in 2005. 'We are examining the possibilities of future investment projects in the Sultanate,' he said.
The executive chairman of Dubai Financial Soud Ba'alawy, said: 'We believe BankMuscat is at an extremely interesting point in its growth curve, with the domestic Omani economy rapidly diversifying and gaining momentum in terms of growth. We believe in the strength of the management at BankMuscat and will work with them to grow rapidly in the region.'
BankMuscat announced a net profit of Dh382.8 million ($104.4 million) for the half year ended June 30, 2007, as against Dh266.7 million ($72.7 million) for the same period in 2006, a growth rate of 43.6 per cent.
In June, Dubai Financial agreed to buy a 60 per cent interest in the Bahrain-headquartered investment bank, TAIB Bank. And last year, it bought a 31.5 per cent stake in Greece's Marfin Financial Group. |
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Courtesy Khaleej Times
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