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.
