(MENAFN - Khaleej Times) Alizz Islamic Bank, Oman's first Islamic bank, which was founded by Abu Dhabi's Aabar Investments and other regional partners, will be launching its initial public offering, or IPO, on September 22.
With a paid up capital of RO100 million, the bank will offer 400 million shares. The subscription will be open for both eligible Omani and non-Omani investors from until October 21.
Up to 60 per cent of the shares on offer in the IPO are reserved for small investors who apply for 100,000 shares or less, while the remaining 40 per cent is reserved for large investors who apply for more than 100,000 shares.
Alizz Islamic Bank is promoted by Huriah Company, owned by Sayyid As'ad bin Tarik Al Said; Aabar Investments, which is 95 per cent owned by the International Petroleum Investment Company of Abu Dhabi; First Energy Oman, a wholly-owned subsidiary of First Energy Bank; and Tasameem Real Estate Company, an investment company headquartered in the UAE.
The promoters' objective is to establish the first Islamic banks in Oman to offer comprehensive business and retail Islamic banking solutions. They have already contributed RO60 million, which will represent 60 per cent of the share capital of Alizz Islamic Bank and are inviting investors to participate in equal commercial terms under the IPO to become shareholders.
The proceeds, along with the promoters' capital, will be used as Tier 1 capital and will fund pre-commercial launch operating costs and initial operations, until such time as bank's cash flows are sufficient to meet expenses.
The offer price for each share has been fixed at 102 baisa, which comprises the nominal value of 100 baisa per share and a two-baisa per share contribution towards the issue expenses of the IPO.
The IPO has been fully underwritten, at the offer price of 102 baisa per share, by seven banks and investment companies in Oman, including Bank Muscat, Ahli Bank, Bank Dhofar, Bank Sohar, Financial Corporation Company, United Securities and Gulf Baader Capital Markets.
The Islamic banking market in Oman is expected to experience rapid growth. The par-value IPO will enable investors participate in Islamic banks alongside strong and experienced promoters on an equal footing and benefit from the growth opportunity in the Islamic banking sector in Oman.
Jamal Darwiche, chief operating officer designate of Alizz Islamic Bank, said Islamic banking in Oman has the potential to draw unbanked sections of the population into the banking market.
"Against the GCC average of 114 per cent, Oman's banking penetration was at 70 per cent in 2010, suggesting ample room for growth in the Omani banking sector including Islamic banking," he said.
By 2015, Islamic banking assets in Oman are expected to exceed OR2 billion, representing 10 per cent of total banking assets.
Bank Muscat Investment Banking Division is the financial adviser, issue manager and one of the six subscription banks for the IPO. The other subscription banks are Ahli Bank, Bank Dhofar, Bank Sohar, National Bank of Oman and Oman Arab Bank.