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Posted On: 16 April 2013 09:51 am
Updated On: 12 November 2020 02:12 pm

Barwa Bank to raise $563m with Doha IPO - CEO

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Barwa Bank, a Qatari lender part-owned by an arm of the state's sovereign wealth fund, plans to raise 2.05 billion riyals ($563 million) through two share sales including a public float on the Doha bourse, its top executive said on Monday. The Islamic lender will issue 50 million shares at 21 riyals per share through an initial public offer on the Doha bourse, the bank's chief executive Steve Troop said in an interview. Barwa also plans a rights issue to existing shareholders of 50 million shares at a price of 20 riyals a share. The nominal value of the shares is 10 riyals and the sale of the additional 100 million shares will result in a capital increase of 1 billion riyals to 4 billion riyals, the bank said. Qatari banks, including Qatar National Bank and Doha Bank, have raised additional capital in recent months as they embark on regional expansion and prepare for the Gulf state's massive infrastructure spending plans, which will extend into the next decade. Barwa completed a 1.7 billion riyal rights issue last year to fund its growth. "Qatar is on the eve of a very significant investment in infrastructure over the next several years. This represents a once-in-a-professional-lifetime opportunity to grow our business. We want to participate in these opportunities," Troop said. The bank has received shareholder approval for its capital-raising plan and now requires the nod of the Qatar Financial Markets Authority and the Ministry of Business and Trade, Troop said, adding that the bank was in discussions with both entities. He did not give a time frame for the share issues. Barwa Bank is 37.3 percent owned by Barwa Real Estate Co while Qatar Holding, the investment arm of the Gulf state's sovereign wealth fund, has 12.1 percent. The remaining shares are owned by several individuals and corporations, according to the bank's results statements. One project in which the bank hopes to participate is Qatar's planned rail scheme, Troop said, adding that Barwa was part of an Islamic banking consortium looking at the opportunity. "Those kinds of opportunities won't require foreign support," he said. Qatar's Doha Bank announced in January that it would seek to increase its capital by 50 percent. Its 1.55 billion riyal rights issue was nearly twice covered by investors in March. Troop said regional expansion was also a prospect being considered by his bank. "The need to expand overseas is something to bear in mind. That will be with the right assets and the right price. At this stage it would be fair to say we'd be looking at Gulf and MENA (Middle East and North Africa)." Barwa intends to begin the process of securing a credit rating later this year, before the bank might issue a sukuk (Islamic bond), Troop said. "We wanted the ratings agency to look at the H1 numbers and the incremental capital we're hoping to raise. We're confident that we will generate the rating we think we merit." The lender posted a profit of 345 million riyals for 2012, a 41 percent increase from the previous year. It has been especially active in the fixed income sector, serving as co-lead arranger on Turkey's $1.5 billion sovereign sukuk deal last September. It was a mandated joint lead manager on Qatar's bumper $4 billion Islamic bond sale last July. Troop said the bank was in discussions with potential Islamic debt issuers. "We are in conversations. We have a reasonably strong pipeline at this time. There are still significant and deep pools of Islamic liquidity that seek an appropriate investment." Source: Arabian Business