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Commercial Bank of Qatar Chairman Abdullah bin Khalifa Al Attiyah (third left); Vice Chairman Sheikh Abdullah bin Ali bin Jabor Al Thani (second left); Managing Director Hussain Al Fardan (fourth left) and other members of the board of directors at the Extraordinary General Meeting in Doha yesterday. (Salim Matramkot)
DOHA: The Extraordinary General Meeting (EGM) of the Commercial Bank of Qatar has approved the Board of Directors’ proposal to raise up to QR2bn in Additional Tier 1 Capital to enhance the Bank’s capital adequacy ratios and to support the future growth across the Group.
The Bank will issue the Tier 1 Capital Instruments directly. ”This hybrid instrument, which is treated as an equity instrument with a fixed return will qualify as Additional tier 1 Capital. The Instrument will not dilute existing shareholders or affect their shareholding and offer no voting rights to the holder”, the Bank Chairman Abdullah bin Khalifa Al Attiyah and the Managing Director Hussain Al Fardan said after the EGM here yesterday.
The EGM approved the five-point agenda, including the amendment of the article concerning non-Qatari investors.
Hussain Al Fardan said that the Additional Tier 1 Capital Instruments are perpetual capital instruments and therefore will not have a fixed maturity date. The Instruments will be issued in order to strengthen the Bank’s capital adequacy ratio as measured under the capital adequacy regime established by the Qatar Central Bank.
The Instruments will carry a fixed interest rate and the Bank will pay the return to the holder of the Instruments on specified agreed dates during the first 6 years.
After the initial 6 year period, the return Rate will be reset according to a pre-agreed price adjustment mechanism, taking into account the prevalent reference rate at that time.
The payment obligations of the Bank with respect to the |Instruments will be direct, unsecured, conditional and subordinated obligations of the Bank, meaning that claims in respect of the Instruments will rank junior to all other senior debt, but will rank above claims on ordinary shares of the Bank for these Instruments.
The investors in this Issue will be institutional in nature and most likely, Qatari Government-related entities. The Bank intends to use the proceeds of the Issue for general corporate purposes.
Negotiations with regard to the Issue process have commenced and the Board of Directors has given management the authority to proceed with the preparation of all relevant documentation.
The Peninsula
