Abu Dhabi Islamic Bank’s board of directors (BoD) has agreed to double the bank’s paid capital, from EGP 2 billion to EGP 4 billion.
More Details🧐 The EGP 2 billion capital increase will be distributed over 200 million shares at a par value of EGP 10/share.
ADIB’s BoD also agreed to sell the bank’s 50.88% stake in El Kahera El Watania Investment (KWIN).
Why is this Important🤔 ADIB was down 18.29% at the end of yesterday’s trading session.
Are Capital Increases a Bad Sign?😬 Investors worry that when a company increases its capital, it could be a sign that the company has financial solvency issues, which is why it needs to raise additional capital.
But that doesn’t mean capital increases are bad news. If companies manage to invest the raised funds successfully & finance additional company growth, the capital increase can ultimately be beneficial for investors.
ADIB did not yet disclose what it plans to do with the additional capital.