The Financial Supervisory Authority (FRA) approves Al Baraka Bank’s (SAUD) capital increase from EGP 2.9 billion to EGP 5 billion.
The increase of EGP 2.1 billion will be distributed over 302.9 million shares with a par value of EGP 7 per share, as bonus shares.
The following sources of funding are used to fund the increase:
EGP 742.2 million, distributed over 106.042 million shares, will be raised by distributing the shareholders’ portion of the attributable earnings in 2021.
EGP 1.3 billion will come from the legal and general reserve balances, distributed over 196.928 million shares.
What is the legal reserve?
It’s a reserve mandated by the Companies Law, as it deducts 5% of profits each year until it reaches 50% of the issued capital. It can be used to deal with company losses or raise capital, but it is not used in cash dividends distribution.