UAE's FAB plans to raise up to $4.08 billion in one of largest Gulf rights issues in recent years

By Federico Maccioni

DUBAI, Nov 11 (Reuters) - First Abu Dhabi Bank FAB.AD, the UAE's largest bank by assets, is looking to raise up to 15 billion dirhams ($4.08 billion) through a rights issue, it said on Wednesday, one of the largest in the Gulf in recent years.

The proposed deal would accelerate the next phase of the bank's growth, capturing significant opportunities in both the domestic market and across its international network, CEO Hana Al Rostamani said in a statement.

The rights issue comes as the conflict in the Middle East continues to rock the region. While business in the UAE has largely resumed after strikes against the country earlier in the war, recovery in sectors such as hospitality and tourism could take longer.

FAB last month reported a 6% rise in third-quarter net profit, driven by growth in net interest income as assets reached 1.47 trillion dirhams by end-September. Its shares are up 10.6% so far this year.

While growing domestically in the years prior to the war, the bank has also been seeking to expand across the region and outside the Gulf. In 2023, it said it had considered a bid for Standard Chartered.

LARGE DEAL

FAB's proposed rights issue would be one of the largest in the region in recent years, where companies including lender ADCB ADCB.AD and Saudi water and power company ACWA Power 2082.SE are among those to have tapped equity markets.

FAB is offering around 1.1 billion new shares at 13.52 dirhams each, a 30% discount to Tuesday's closing price on the Abu Dhabi bourse.

Its top shareholder, sovereign wealth fund Mubadala with a 37.9% stake, plans to subscribe for its full pro-rata entitlement, FAB said.

FAB expects the transaction to be completed in the first quarter of 2027. It is acting as lead manager, bookrunner and sole receiving bank, while JP Morgan was appointed as financial advisor.

($1 = 3.6724 UAE dirham)