Shuaa Capital, the Dubai-based investment banking and financial services firm, has been appointed as lead manager and underwriter on the rights issue of sharia-compliant insurer Dar al-Takaful.
The insurance firm seeks to raise AED50m ($13.6m) through the rights offering to maintain the capital requirements and strengthen its balance sheet. The issue, starting from 20 April will have National Bank of Abu Dhabi acting as the receiving bank, Shuaa said in a statement to Dubai Financial Market (DFM), where its shares are traded.
Dar al-Takaful will issue 50,000,000 new shares at a price of AED1.02, reflecting the nominal value of AED 1 per share. All Dar al-Takaful shareholders holding shares at the close of trading on April 20, will be entitled for the rights. Each shareholder exercising rights on the eligibility date will receive one right for every two shares held, according to the statement.
The Dubai-listed insurer plans to use its enhanced capital base for meticulously planned expansion strategies, Abdul Aziz al-Bannai chairman of Dar al-Takaful was quoted as saying in the statement.
Shuaa, which was one of the top UAE investment banks before 2008 financial crisis, has struggled the win mandates in the recent past due to subdued capital markets and negative investors sentiment on the back of falling oil prices. The UAE-based Abu Dhabi Financial Group (ADFG), last year, bought Dubais Groups 48.3 per cent stake in Shuaa and it plans to restore Shuaa to the position of a leader in capital market advisory business. Dar al-Takaful mandate is the second advisory role for Shuaa in recent weeks. It is advising the parent ADFG along with National Bank of Abu Dhabi as the lead financial advisers, global coordinators, and joint bookrunners for the listing of Etihad REIT, a Shariah-compliant real estate investment trust (REIT).
The investment trust is seeking listing on one of the UAE exchnages and could raise as much as $500m through the initial public offering.