There will also be a drop in horizontal visibility as light to moderate winds are expected, causing blowing dust
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The telecom company, also known as Emirates Integrated Telecommunications Co, will hold an extraordinary general meeting on May 11 to get shareholder’s approval for the capital increase. The rights issue subscription period is expected to run from May 27 to June 8. The issue price of the new shares is expected to be no more than Dh1.91 each new share.
JPMorgan Chase & Co will act as the rights issue coordinator and book runner, and Mashreqbank PSC will be the lead-receiving bank collecting orders from investors. “The new funding will allow us to continue to deliver on our promise, ultimately enabling the company to carry on building a successful, sustainable telecommunications business. We look forward to an accelerated and profitable growth strategy,” Chief Executive Osman Sultan said in a conference call.
Du has the support of its major shareholders, who plan to subscribe to the rights issue, Sultan said. The firm is partly owned by Dubai Holding and Mubadala Development of Abu Dhabi. The remaining 20 per cent of its shares are publicly traded on the Dubai Financial Market.
Speaking to Khaleej Times, Sultan said the company would not be using the new funding to pursue any inorganic growth. “We will focus on growing within the UAE, and for the time being have no plans to speed up growth through overseas forays or acquisitions.”
“We have no plans to move outside the UAE in our core businesses of telecom. The timing and existing scene wouldn’t allow us to create the right value for our shareholders,” he said.
He, however, did not rule out the possibility of forming regional alliances that could help advance its peripheral businesses such as its Internet and social networking platforms. Sultan said most of the new funding would go to its mobile network for better Internet services. It has no plans to build its own core infrastructure such as a fibre-optic network, which it shares with Etisalat.
Sultan said he didn’t see du’s shareholding structure, in which minority investors own 20 per cent, changing much after the sale. The company will also resort to bank and vendor financing to meet future requirements. It may also look at tapping the debt market in coming years, he said.
The company, which posted a net profit of $71.89 million in 2009, has earmarked Dh2.2 billion for capital spending this year. Cash raised through the rights issue will support investment over the next three to four years, Sultan said.
However, du’s stocks lost 4.6 per cent, the most since December 9, to Dh2.73 on Monday following the announcement.
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