January 13, 2010 / 7:11 AM / 9 years ago

Libya to underwrite bank ABC rights issue

MANAMA (Reuters) - The Central Bank of Libya is underwriting a planned $1.1 billion capital hike of Bahrain-based Arab Banking Corporation (ABC), the bank said on Wednesday, while Kuwait is also expected to subscribe.

Libya’s central bank currently owns a 29.5 percent stake in the bank, with Kuwait Investment Authority (KIA) and the Abu Dhabi Investment Authority (ADIA) also owning stakes of almost 30 percent in the bank. Other Libyan entities own an additional 6.9 percent stake.

ABC said in a statement posted to the Bahrain stock exchange it also expects KIA to fully subscribe to its share in the rights issue.

The bank plans to increase its capital to $3.11 billion to finance its Middle Eastern growth strategy and to prepare for stricter regulatory measures it expects for 2010.

It said that Libya’s underwriting depends on the Central Bank of Bahrain (CBB) and other shareholders waiving an obligation to make a mandatory offer to other shareholders.

If Libya fully takes the rights issue, priced at $1 per share, its stake would rise to 41.7 percent, it said.

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