Rights issue oversubscribed, share capital to increase by RO 40 million supporting growth strategy
Galvanized by an overwhelming response from shareholders, Sohar International announced the successful closure of its rights issue with an oversubscription, raising its Tier I capital by OMR 40 million. The increased paid up capital is well in line with the bank’s growth strategy and its vision in becoming a world-leading Omani service company that helps customers, communities and people to prosper and grow.
Despite a challenging global, regional and international economic environment, the overwhelming response from shareholders to the issuance, reaffirms the Bank’s positive market position and investor confidence. The issuance marks the largest in local currency by any bank, and the largest by any firm in 2018/2019 under the Capital Market Authority (CMA) and listed in Muscat Securities Market (MSM).
Commenting on the successful closing of the rights issue and shedding more light on Sohar International’s growth momentum, Mr Ahmed Al Musalmi, Chief Executive Officer of Sohar International remarked: “With a strong purpose at heart of helping people win by delivering banking for their ever-changing world, we have set forth onto a new era for the bank that will see it revolve and evolve to continue redefining banking. The move to increase our capital was part of the on-going five-year strategy that had been carefully crafted in year 2018 and put into effectiveness in year 2019. The bolster to our capital will further strengthen our strong base and our capital adequacy ratios - which are already above regulatory requirements - enabling us to provide more value, more vision, and more velocity to our customers and shareholders alike. This increase in capital when viewed in conjunction with the recent increase of RO 100 million in additional Tier 1 securities has resulted in improve in the bank’s capital structure and has positioned Sohar International to pursue more growth opportunities ultimately contributing positively to Oman’s economy and its diversification agenda.”
The issuance saw a varied base of investor participation, including government, quasi government agencies, large corporates, insurance companies, high net worth individuals and family offices. Such participation demonstrates the robust capabilities of Sohar International in terms of attracting capital to advance its strategic agenda.
Mr Al Musalmi added: “Our stakeholders have extended their support and are confident in Sohar International’s growth potential as demonstrated by the strong demand witnessed during the rights issue. We are hence more fortified than ever before to increase market share and profitable growth for our shareholders.”
In December 2018, Sohar International’s board of directors had authorised a capital increase through a rights issue. The issue closed on July 21, 2019, after receiving funds worth more than RO 40 million. Sohar International issued the new shares accumulating to 308,952,381 shares that began normal trading on the Muscat Securities Market (MSM) on 28 July 2019. The new share issuance will increase the issued share capital to RO 239 million from RO 198 million.
The financial results of the six months ended on June 30, 2019 reported a strong growth of 32.91 per cent in net profit. Achieving a net profit of OMR18.58 million as compared to a net profit of OMR 13.98 million during the same period in 2018, Sohar International cements strong footings to capitalize on future opportunities and navigate challenges with a winning spirit.