Industrial Development Bank completes share capital increase of US$100 million
Source: BI-ME , Author: BI-ME staff
Posted: Sun February 15, 2009 12:00 am

UAE. Dubai Islamic Bank (DIB) today announced the official re-launch of Jordan-based Industrial Development Bank (IDB) following the completion of a private placement of 26 million shares of IDB, valued at US$100 million.

As part of the re-launch, IDB has been transformed into an Islamic financing institution to be known as Jordan Dubai Islamic Bank (JDIB).

The parties involved in the private placement transaction include Jordan Dubai Financial (JD Financial), the investment arm of Jordan Dubai Capital, DIB and Dubai International Capital. The private placement was valued at JOD 2.750 per share, based on the pricing equation adopted by the bank's Shareholders General Assembly, wherein the strategic partner, Mesc Investment, covered the entire placement.

Mesc is owned by Dubai International Capital, which owns 20%; DIB, which owns 20%; and JD Financial, which owns the remaining 60%. Mesc is JD Financial’s third and biggest investment to date in this field. Mesc's contribution increases the new bank’s capital by US$26 million, while simultaneously becoming the owner of a 52% stake in the new entity.

In addition to its stake in newly formed JDIB, the agreement enables DIB to provide the technical support and supervision needed to restructure IDB in line with international best practices for Islamic banking by giving IDB access to DIB's extensive expertise in structuring innovative Shariah-compliant financial products and services.

HE Samir Z Al-Rifa'i, CEO of JD Capital, said: "We are proud of the completion of the acquisition in IDB and its first step towards transforming into 'Jordan Dubai Islamic Bank,' which reflects the great confidence that the project’s investors have placed in the Jordanian economy. Sharia-compliant banking institutions have been the least affected in the face of the current global economic crisis, which makes Sharia-complaint banking an ideal solution. The support and encouragement that the Jordanian government has shown in this regard, and the attractive investment environment that Jordan enjoys, have both played a pivotal role in making this deal a great success.

"We look forward to providing comprehensive Islamic baking services through this project, which will satisfy the Jordanian market's growing demand for Islamic banking tools. We hope that DIB, through this initiative, will take us closer to achieving our vision of becoming a comprehensive financial institution that follows the highest international standards, which enable the entity to compete effectively not only among the country's Islamic banking institutions, but also on the Jordanian banking sector level in general, in compliance with HM King Abdullah II’s vision in developing Jordan's economy and giving it an advanced position on an international level," he added.

Khaled Al Kamda, Group Managing Director of Dubai Islamic Bank, said: "The successful completion of this venture despite the economic and financial challenges facing the world today is a testament to our faith as investors in the resilience of Jordan's economy and the innate opportunities the Kingdom enjoys, particularly in the financial services and Islamic investments sector. We are committed to concentrating our efforts on this project and, through it, to instigate positive results that serve this sector."

Mufleh Akel, Chairman of IDB, commented: "The project was built upon strong investment foundations that combine the expertise of some of the largest institutions that have extensive experience in the investment field, particularly in Islamic investment. These institutions were joined together by a common ambition to bring greater value to the Jordanian Islamic banking services market – which like other sectors requires continuous support and a full utilization of its capabilities and opportunities –  thus directing our efforts to serving Jordan's investment environment."

DIB is the first Islamic bank in its field. It has been providing Sharia-compliant banking services since the 1970s, and has investments in many financial sectors across the Islamic world. DIB has created subsidiaries that practice Sharia-compliant banking in Pakistan and Sudan with great success. This latest venture will add Jordan to the firm's portfolio.

JD Capital recently won the Best Investment Company Award at the 2008 Arabian Business Award ceremony in Jordan. The award was won for the prominent role that JD Capital played in stimulating economic development in Jordan. JD Capital strives to empower the Jordanian economy on a regional level and increasing shareholder returns through its utilisation of the growing investment opportunities in Jordan, and benefiting from the economic growth that the various sectors are experiencing. 

 

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