Kuwait-based Gulf Bank has raised a total of KWD376 million of capital, by way of a rights issue of 1.25 billion new shares including the auction of 36.26 rights to treasury shares at 20 fils per right.
The bank has also said that prior to the rights issue, credit/investment provisions and losses in derivatives were quantified by external auditors at KWD375 million. Existing shareholders took up 68% of the new shares at a price of 300 fils per share. Holders of treasury shares rights acquired 36.26 million shares at a price of 300 fils per share.
The balance of unsold shares will be purchased by the Kuwait Investment Authority at a price of 300 fils per share, giving it approximately 403 million shares, representing 32% of the new rights issue and a final ownership stake in Gulf Bank of 16%.
This capital raising has resulted in the bank having a pro-forma core tier one capital of 12.5%, on a proportionally consolidated basis, enhancing the bank’s financial strength and flexibility in the face of continuing turbulence and uncertainty in global financial markets.
Kutayba Alghanim, chairman of Gulf Bank, said: We are moving forward. While the bank has completed this recapitalisation, it is only the first step in a broad and sustained effort to further leverage our existing strengths to build a stronger banking franchise in Kuwait. Our retail and corporate customer base, solid organisation and strong brand are only the starting point.
