Arab Bank ABC Trades Shares at Brazil’s Stock Exchange

São Paulo stock exchange ABC Brazil bank, the Brazilian branch of the Arab Banking Corporation (ABC), which is headquartered in Bahrain, is going to promote its first initial public offering (IPO) since the organization started operating in Brazil.

According to the market announcement published Wednesday, July 11, in the economy and finance daily Valor Econômico and in the Official Gazette of the State of São Paulo, the bank is going to promote an initial public offering of 44.4 million preferred shares, and a secondary offering of 700,000 shares, also preferred.

The IPO will be promoted with new shares, which will result in an increase of capital, and the secondary offering will be of shares that currently belong to the bank's shareholders.

This way, the company's social capital should rise from the current 459.2 million Brazilian reais (US$ 243 million) to 1 billion reais (US$ 529.1 million), according to information disclosed by ABC Brazil.

Those interested may reserve shares from now to July 19. In the market warning, the bank has estimated the price of the shares to be between 11.50 reais (US$ 6) and 15.50 reais (US$ 8.20), forecasting a capital increase of around 608.8 million reais (US$ 322.1 million), if an average price of 13.50 reais (US$ 7.14) is considered.

The bank's shares should start being traded at the São Paulo Stock Exchange (Bovespa) on July 25th, according to the schedule. If the IPO is oversubscribed, an extra 6.7 million shares may be offered.

Arab Banking Corporation has 85.6% of the voting capital and 83.8% of the total capital of ABC Brazil. After the IPO, the organization's participation in the voting capital will remain the same, but the share in the total capital will drop to 51.7%, in case the supplementary shares are also placed on the market. If the supplementary shares are not issued, the percentage will be 56%.

The Brazilian directors at the institution, in turn, who currently have 14.1% of the capital, will have a participation of 8.7% after the issue is concluded, if the supplementary shares are offered. If the extra shares are not offered, the directors will have 9.4%.

ABC Bahrain controls ABC Brazil through a holding called Marsau Uruguay, which is fully owned by the Arab bank. The Arab Banking Corporation partners are the Kuwaiti investment agency (28.61%), the Libyan Central Bank (28.46%) and the Abu Dhabi investment agency (26.56%). The remaining shares are traded on the stock market. The institution is among the largest Arab financial institutions and is present in 21 countries.

The Brazilian branch, based in São Paulo, has total assets of 4.2 billion reais (US$ 2.2 billion) and net equity of 459 million reais (US$ 242.8 million). In the first quarter of the year, ABC Brazil had net profit of 18 million reais (US$ 9.5 million), a 38.5% increase when compared to the same period last year.

In the whole of 2006, the net profit registered was 61 million reais (US$ 32.2 million), as against 58.7 million reais (US$ 31 million) in 2005.

The underwriters of the IPO are banks UBS Pactual and Itaú BBA, with Real, Espí­rito Santo and HSBC banks participating in the syndicate. There are almost 50 stockbrokers involved.

Further information

ABC Brazil
www.abcbrasil.com.br

Anba – www.anba.com.br

Tags:

You May Also Like

We Are in This Together, Says Brazil About Preservation of Biodiversity

Brazil is home to between 15% and 20% of all living species, according to ...

For Brazilian Professor, New Torture Law in the US Is Old News

The Military Commissions Act of 2006 signed into law by President, George W. Bush, ...

Brazil to Lower Its Long-Term Interest Rates to 9%

Latin American stocks were mixed, with Brazilian shares slumping on profit taking following recent ...

Brazil Invests 1% of GDP in Technology. That’s Not Enough.

The only way Latin America can overcome 25 years of low economic growth is ...

Brazil: Software Firms Join the Free Software Bandwagon

The Brazilian government has won an unlikely ally in its campaign to spread the ...

Arabs Increase Buys from South of Brazil by 52%

Sales from the state of Paraná, in the Brazilian South, to the Arab market ...

Brazil Lets Airlines Offer Discounts on International Flights

The Brazilian government is starting to loosen its grip on international airline tickets including ...

Brazil Bank to Finance All Concerning Biodiesel

Brazil’s National Economic and Social Development Bank (BNDES) announced the creation of the Program ...

Crê Ser condominium in Bahia, Brazil

From Shacks to Homes a Brazilian Community Teaches There’s No Impossible

The streets off Praça Viva Gente were blanketed with grayish-green igneous rock. Well manicured ...

Italy Goes to Brazil to Build Ports and Railroads

Brazil’s Minister of Planning, Budget, and Management, Guido Mantega, signed an agreement, October 28, ...