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Sharjah government plans to invest about $517 million in Invest Bank

The Government of Sharjah will invest up to 1.9 billion dirhams ($517.32 million) in Invest Bank, the lender said on Wednesday, disclosing details of the two-stage investment plan.

The Sharjah government stepped in to support Invest Bank, after it was hit by recent high levels of loans.

The Government of Sharjah will buy 1.59 billion shares of Invest Bank for 1.115 billion dirhams, or 50.07 percent of the total issued share capital of the bank, Invest Bank said.

This is to enable Invest Bank to maintain capital adequacy after booking provisions of 1.266 billion dirhams in the third and fourth quarter financial statements, it said.

Shareholders of the bank will meet on Dec. 29 to approve the capital increase. Barclays is advising Invest Bank for the fund raising programme.

The Sharjah government will also subscribe in full to the shares offered to it as part of a rights issue to be undertaken by Invest Bank in 2019 and any new shares offered to other shareholders, which remain unsubscribed.

“The Government of Sharjah would subscribe for such remaining shares, in each case subject to its aggregate commitment of 785 million dirhams, as capital support for further potential provisions to be booked during 2019,” it said.

The UAE’s central bank has pledged to stand ready to extend “all the available liquidity facilities” to Invest Bank and that it had been working to develop a plan to strengthen the lender’s capital base.

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