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Abu Dhabi Islamic Bank Seeks AED1.75 Billion from Rights Issue

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Abu Dhabi Islamic Bank Seeks AED1.75 Billion from Rights Issue

Abu Dhabi Islamic Bank (ADX:ADIB) is aiming to raise 1.75 billion Emirati dirhams through a rights issue to help finance its next phase of growth, particularly initiatives under its Vision 2035 strategy.

The Islamic financial institution is offering 106,383,000 new ordinary shares at 16.45 dirhams per share, representing a 28.8% discount to the bank's Monday closing price. Eligible shareholders will be able to subscribe for one new share for every 34.14 shares held, the bank said Tuesday.

"Vision 2035 provides us with a clear roadmap to build on this momentum and accelerate ADIB's next phase of growth. The proposed rights issue reflects the opportunities we see ahead and our confidence in the Bank's long-term growth prospects," said ADIB Group Chief Executive Officer Mohamed Abdelbary.

The offering is subject to the approval of shareholders and the Central Bank of the United Arab Emirates, among other relevant regulators. Directors of the lender already approved the proposal and major shareholders have expressed commitment to participate in the offering.

Shares of the bank declined more than 1% in midday trading Wednesday.

"ADIB's announced AED1.75bn rights issue (after mkt) does not come as a complete surprise and it removes a key capital-related overhang from the stock as it adds 86bps to the group's CET1 ratio. Nevertheless this step was expected alongside ADIB's D-SIB categorization, any confirmation on which is yet unavailable," Jefferies commented.

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