UAE: New takaful company's IPO oversubscribed
Source: Middle East Insurance Review | Feb 2017
The IPO of Orient UNB Takaful was oversubscribed by around 13 times, according to Union National Bank (UNB).
Orient UNB Takaful offered 600,000 ordinary shares at a share price of AED100 (US$27.20) plus AED1 as issuing expenses, representing 30% of the new company’s total equity.
A total of AED826 million was collected from IPO subscribers, representing nearly 14 times the AED60 million to be raised from the exercise. The shares are to be listed on the Dubai bourse.
The IPO subscription period was open from 29 November to 15 December 2016. Excess money was refunded to subscribers on 20 December 2016, according to Mubasher, citing a statement from UNB.
UNB, which is the lead manager and lead receiving bank for the IPO, announced last November that it had tied up with Orient Insurance Company to form the Islamic insurance joint venture.
UNB and Orient Insurance hold a combined 70% stake in Orient UNB Takaful.
Mr Mohammad Nasr Abdeen, UNB CEO, said: “Despite the high number of insurance companies operating in the UAE, we see an opportunity, as there is only a limited number of companies operating in the field of takaful. In addition, there is a growing demand for Shariah-compliant financial products and services and insurance products.”
AED1 = US$0.27