Monday 11, September 2017 by Nabilah Annuar

United Gulf Bank EGM to decide on a reorganisation proposal of the bank

United Gulf Bank’s (UGB) Board of Directors have called for an extraordinary general meeting (EGM) on the 25 September 2017 to seek approval from shareholders for the reorganisation.

Following a detailed internal review of UGB’s balance sheet structure, the Board of Director’s proposed for shareholders approvals to carve out its regulated banking activities to optimise the capital structure and set up clear goals/vision for the two distinct business lines of UGB. The Central Bank of Bahrain (CBB) has granted its in principal approvals on the reorganisation, subject to shareholders and other regulatory approvals.

Majority shareholder, KIPCO has floated a new Holding company in Bahrain, under the MOIC-United Gulf Holding Company (UGH), which will ultimately own the existing UGB (Regulated Banking Entity). UGH will be listed on the Bahrain Bourse to ensure transparency and proper governance.

The majority and minority shareholders will be transferred to UGH retaining same shareholding at consolidated UGH level (through a share swap process). The UGB will maintain its wholesale conventional bank governed by CBB, and will be delisted and converted into a closed company.

The proposed reorganisation will have no change in the overall shareholding structure upon completion. The core assets and all the related MT loans of UGB will be transferred to the UGH. The regulated banking activities, AMIB assets along with related liabilities will be retained at UGB level.

UGH will acquire 100 per cent of the shares of UGB (net of treasury shares), at an exchange ratio of one newly issued UGH share for every two UGB Shares. The acquisition of UGB shares will be made with reference to the carrying values of UGB’s assets and liabilities as per UGB latest consolidated reviewed financial statements.

Overall reorganisation will have insignificant dilution of ownership rights of minority shareholders of less than 0.1 per cent. UGB Board has considered the overall reorganisation and proposes shareholder’s approvals as in all reasonableness and to the best of their knowledge considers it to be fair and insignificantly dilutive to the economic interest of UGB shareholder.

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