The government of Sharjah in the United Arab Emirates has agreed to invest up to 1.9 billion dirhams in Invest Bank PSC through a two-stage investment plan.
In a letter to shareholders dated Dec. 25, Invest Bank said the emirate will provide roughly 1.12 billion dirhams in exchange for 1,592,857,143 new Invest Bank shares, which represent 50.07% of the lender's total issued share capital following the strategic investment.
Sharjah's government will also subscribe in full to shares offered to it as part of a rights issue to be undertaken by the bank in 2019 and to any unsubscribed shares offered to other shareholders for a total commitment of 785 million dirhams.
The bank said the financial assistance will help it maintain capital adequacy after it booked provisions of 1.27 billion dirhams in the third- and fourth-quarter financial statements.
Shareholders of the bank will meet Dec. 29 to approve the capital increase, with Barclays PLC acting as an adviser to Invest Bank in the fundraising.
As of Dec. 26, US$1 was equivalent to 3.67 UAE dirhams.