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Trading of Emirates NBD Bank’s rights issue to take place this November

Rights are distributed among shareholders in proportion to their number of shares

DUBAI: Dubai Financial Market, DFM, yesterday announced that the rights issue of Emirates NBD is due to be tradable on the exchange between November 3 and November 14.

Trading of the rights issue enables existing shareholders of the bank, who do not wish to subscribe to the new shares, and which the bank plans to issue as part of its capital increase, to sell all or part of their rights to other investors who do wish to subscribe.

The rights issue is a financial instrument representing the rights that are legally granted to the company’s shareholders to have priority in subscribing for the company’s capital increase shares that will be issued.

The rights are distributed among shareholders in proportion to the number of shares they own and shall be recorded in their accounts with brokerage or custody firms if the original shares were recorded in the shareholders’ accounts with them, whereas it shall be recorded in their accounts with clearing if the original shares were recorded with the clearing house.

The shareholder will receive one “Right” for every 7.3242 shares owned by the shareholder and held on the eligibility date, being October 31, 2019. According to the DFM, as there are no fractions of shares, and thus, in the invitation to shareholders to subscribe for the new shares issued on October 17, the number of shares required to receive one right was rounded to eight shares.

The rights issue will be solely tradable during the above-mentioned time frame with a distinct trading symbol, ENBD-RI19, not the symbol of the main stock of the respective company. The priority right to subscribe for the capital increase shares shall be given to the owners of the rights issue at the end of the clearing and settlement cycle for the trades of such rights. The rights issue has a preset validity and inevitably loses its value if the owners do not subscribe to the capital increase shares.

The opening price of the rights issue has been set at Dh3.56 based on the bank’s adjusted share price on the market minus the issuing price of the new shares.

The rights issue will be free-floated on its inaugural day only, while price movement will be in line with DFM’s fluctuation range of 15 per cent up and 10 per cent down from day two until the end of the trading period. The rights issue is subject to all regulations of trading, clearing, settlement and commissions in effect in the market will be applicable to trades of the rights issue, which are not subject to mortgage, or to margin trading.

Subscription to Emirates NBD’s new shares will take place between 10th and 20 November 2019 to increase the capital to Dh6.316 billion through the issuance of 758.8 million shares with an issue price of Dh8.50 per share, including a nominal price of Dh1.00 in addition to Dh7.50 premium.