FIMBank plc - Joint Offer from Burgan & UGB

On 22 November, FIMBank plc issued an announcement (following the releases on 13 March 2012 and 9 October 2012) revealing that it received a joint offer by two subsidiaries of the Kuwait Projects Company (KIPCO), namely Burgan Bank S.A.K. and United Gulf Bank B.S.C. (UGB), to acquire a shareholding in the trade finance specialist in three stages.

First Stage

Burgan and UGB will acquire an aggregate 37.56% of FIMBank’s capital from Massaleh Investments K.S.C.C. through a combination of a debt-to-asset swap and an outright acquisition.

Second Stage

UGB will also provide a USD60 million convertible loan to FIMBank. The loan is convertible, at the discretion of UGB, into newly issued and listed shares of FIMBank.

The convertible loan is divided into two equal tranches with the first tranche being convertible at a price of USD0.83 whilst the second tranche will be convertible at a price equivalent to the book value of the ordinary shares of FIMBank (based on the latest published audited financial statements before such conversion) subject to a maximum of USD0.90 per share. As part of this process, UGB is also expected to launch a bid to all FIMBank shareholders for all of their shares.

Third Stage

Finally, FIMBank will launch a rights issue to raise a minimum of USD100 million on terms that have yet to be determined by the Bank. Nonetheless, UGB and Burgan have already undertaken to subscribe in full to all the new ordinary shares to which they will be entitled under the rights issue.

Conditions of the Joint Offer

Amongst the conditions, the joint offer stipulates that UGB and Burgan shall not implement any material changes to FIMBank’s current business model as a trade finance specialist. On its part, FIMBank obliges itself not to issue any new shares, except for current Executive Share Options, that may dilute UGB’s or Burgan’s proposed shareholding.

Moreover, the joint offer is subject to all necessary regulatory and corporate approvals in Malta, Bahrain and Kuwait.

Extraordinary General Meeting

During a Board Meeting held on 21 November, the Directors of FIMBank resolved to put forward certain issues relating to the joint offer for shareholders’ approval at an Extraordinary General Meeting scheduled to be held on 31 January 2013. Further information in connection with this meeting will issued in due course.

Overview of Burgan, UGB & KIPCO

Burgan Bank is a Kuwaiti-based commercial bank with a significant focus on the corporate and financial institutions sectors as well as having a growing retail and private banking customer base. Moreover, Burgan has majority shareholdings in four other banks in Algeria, Iraq, Jordan and Tunisia.

United Gulf Bank is the merchant banking subsidiary of the KIPCO Group and manages a regional network of investment banking and asset management companies.

Kuwait Projects Company (KIPCO) Group is the parent company of both Burgan and UGB. KIPCO is one of the largest diversified holding companies in the Middle East and North Africa with significant ownership interests in a portfolio of over 60 companies operating across 26 countries.