Investcorp share issue oversubscribed 24pc

Investcorp's Tier-1 preference share issue of 200,000 at a nominal value of $1,000 per share (total issue of $200 million), closed on May 16 with a public oversubscription of 24 per cent. It will be listed on the Bahrain Stock Exchange.

The issue, which is non-dilutive to its common shares, is to maintain Investcorp's strong capital base, increase financial flexibility, and finance new business opportunities.

The preference share issue, offering a 10 per cent dividend for the first five years, is the first of its kind undertaken in the Gulf. The issue was initially offered to Investcorp's existing shareholders then, subsequently, to new investors through a public offering.

In order to maintain the $200 million target, preemptive rights subscribers were allotted their full allocation while the public subscribers were scaled back. After the scale-back, the $200 million issue comprised 65 per cent pre-emptive rights and 35 per cent public offer subscriptions.

"We are pleased to see such a strong response from our existing shareholders and the broad participation of many new investors in this new instrument. Our target amount of $200 million was reached and exceeded within four weeks of the launch, resulting in funds being returned to our investors," said Salman Abbasi, Investcorp management committee member and general manager of the firm's Bahrain office.

The issue will be listed on the Bahrain Stock Exchange in the coming week at a par value of $1,000 per share.