Du approves plan to increase capital to $1.24bn

Extra capital will be raised in rights issue within three months - CEO

Tags: Emirates Integrated Telecommunications Company United Arab Emirates
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Du approves plan to increase capital to $1.24bn UAE telco Du is set to raise capital in a rights issue within three months.
By  Shane McGinley Published  May 11, 2010

Emirates Integrated Telecommunications Company, the UAE-telecoms operator better known as Du, has approved a plan to increase its capital to AED4.57bn ($1.24bn) by selling 571.4million shares at AED1.75 ($0.47) each, the company's CEO announced on Tuesday.

The extra capital will be raised through a rights issue, which aims to raise AED1bn ($272m), will be implemented within three months, Du had told the Dubai bourse on Tuesday.

"This morning the extraordinary general assembly of shareholders agreed on the proposition of the board of directors to increase the capital from four billion to AED4,571,428, corresponding to issuing 571,428 new shares with a nominal value of AED1 and a subscription price of AED1.75," Du's CEO Osman Sultan said during a press call on Tuesday.

Sultan said the price corresponds to "a 33 percent discount on the closing price of [Monday] and a 38 percent discount on the closing price before the rights issue announcement." On Monday, Du's price on the Dubai Financial Market closed at AED2.55.

He also confirmed that the extra capital would be used for infrastructural development and would not be used for any expansion of acquisitions outside the UAE.

Earlier today, Du announced that its net profit before royalty for the first quarter of 2010 had more than quadrupled, compared to the same period last year.

The UAE's second telecom operator said profit was AED194m ($52.8m) versus AED47m ($12.79m) in Q1 2009. Compared to the previous quarter, net profit was up by fifteen percent, Du said in a statement.

It added that total revenue for the quarter of AED1.58bn ($430m) showed a 36 percent increase compared to Q1 2009 and a three percent increase compared to Q4 last year.

Company chiefs said the revenue figure for the first quarter of this year was the highest so far recorded. The company said it added 262,000 active mobile subscribers during the quarter taking the total at quarter end to 3,739,000.

 

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