Du, the UAE’s second-largest mobile phone operator, plans to raise AED1bn (US$272m) through a rights issue following an emergency meeting on 11 May as the company seeks to bolster its capital.
In an announcement on the Dubai Financial Market on 19 April,…
Du, the UAE’s second-largest mobile phone operator, plans to raise AED1bn (US$272m) through a rights issue following an emergency meeting on 11 May as the company seeks to bolster its capital.
In an announcement on the Dubai Financial Market on 19 April, Du’s chief executive officer, Osman Sultan, said that the company would use the extra capital to help fund its infrastructure spending programme which the company has already said will cost it AED2.4bn in 2010.
“The AED1bn we are seeking to raise will allow us to continue to deliver on our promise, ultimately enabling the company to carry on building a successful, sustainable telecommunications business. The additional capital is critical to making this happen,” said Sultan.
Du’s three founding shareholders, which together own 78.75% of the equity, all said that they would take up their allocation of the new shares. They also promised to buy any allocations that the owners of the 21.25% of the company’s equity that is listed on the stock market failed to take up.
Emirates Investment Authority is the largest shareholder with 39.5% of Du’s equity. Mubadala Development Company, a sovereign wealth fund, owns 19.75% and Emirates Communications & Technology owns 19.5%.
Du will announce the price for the new shares at its 11 May meeting. The prospectus sets the maximum price for the rights issue at AED1.91 a share.
Du’s shares fell 4.9% from AED2.87 to AED2.73 in the session after the rights issue.
JP Morgan is the bookrunner and Mashreqbank, a UAE bank, is the lead receiving bank.
The company expects to start trading the new shares on 27 June.
