Doha Bank Offers Shares at 44% Discount in Capital Increase Plan

Doha Bank QSC (DHBK), Qatar’s fourth- biggest lender, will increase its capital by as much as 50 percent, in part by offering stock at a 44 percent discount to the current share price in a rights offering.

The company will initially raise capital 25 percent by offering the shares next month at 30 riyals apiece and also plans to issue global depositary receipts to expand capital by as much as a further 25 percent, chairman Sheikh Fahad Bin Mohammad Bin Jabor Al Thani said today on the bank’s website.

“The planned capital raising will potentially remove our main concerns on the stock, weak visibility on loan growth and risks of dividend cuts due to a stretched capital base,” Elena Sanchez-Cabezudo, a Dubai-based analyst at EFG-Hermes Holding SAE, said in an e-mailed report to clients.

Doha Bank said in September that it may raise as much as 5.81 billion riyals ($1.6 billion) from selling shares as it seeks to boost lending and expand in foreign markets.

The company rose 0.6 percent to 53.7 riyals at 12:41 p.m. in Doha, valuing the business at 11 billion riyals ($3 billion).

The bank will offer the new stock on Feb. 20 to shareholders who are registered at the Qatar Exchange at the close of business Feb. 19. The offering will be held after an extraordinary shareholders’ meeting on Feb. 20, which will consider the capital increase and changes to the bank’s articles of association. The price of 30 riyals a share is a premium of 20 riyals over the nominal value of each share, the company said.

The premium at which the global depositary receipts are sold will be higher than the premium in the rights offering, the bank said. It didn’t say when the receipts would be sold.

To contact the reporter on this story: Mahmoud Kassem in Abu Dhabi at mkassem1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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