BBK announced its intention to convert its perpetual tier 1 convertible capital securities to ordinary shares on the first conversion option date on 2nd May 2019 at a conversion rate of 2.5 ordinary shares for every capital security (conversion price of BD 0.400).
BBK had successfully issued its perpetual tier 1 convertible capital securities of BD 86.098 million during 2016, and has been trading on Bahrain Bourse since then. The capital securities had semi-annual coupon payments which were due on 2nd May and 2nd November each year.
Mr. Reyadh Sater, BBK Chief Executive, commented on the news saying; “the bank issued the capital securities back in 2016 with an option to convert them to ordinary shares on three pre-set conversion dates. As we are reaching close to the first conversion date option, the bank has decided to convert the securities to ordinary shares to support the bank’s business growth targets as set out in its strategic plan for 2019-2021, and to compensate the capital securities holders since the current market price of BBK shares is attractive for conversion from investors prospective, noting that this conversion will be subject to the approval of the shareholders that shall be taken at the upcoming Extraordinary General Meeting of the bank”.
The conversion of the perpetual tier 1 capital securities will increase the bank number of shares by approximately 215,243,794 shares, bringing out the total to 1,296,891,746 shares. Accordingly, BBK issued and paid-up capital shall increase from BD 108.165 million to BD 129.689 million.
The last payment of the interest on capital securities for the current capital securities holders will be made on 2 May 2019, and conversion notices will be mailed to them starting Thursday 21 March 2019 through Bahrain Bourse, once the bank’s shareholders approve the conversion in its proposed EGM on 20th March 2019, and after obtaining all the necessary regulatory approvals.
The conversion of the capital securities shall be constructed in accordance with the laws of the Kingdom of Bahrain.