Abyaar general assembly approves capital increase to KD106,727,500

The meeting was held at the premises of Ministry of Commerce & Industry in the presence of shareholders representing 66.45% of the share capital. The general assembly meeting discussed the agenda items for the ended financial year, and the Company's expectations, plans and strategies aimed at realizing its objectives for the current year.

Addressing the shareholders, Abyaar's Chairman Mr. Hesham Abdul- Wahab Al Obaid said that that the Company has achieved positive results in 2008, despite the global financial crisis that hit all markets worldwide. In line with the principle of precautionary measures, and in order to protect the shareholders rights, necessary financial provisions have been set aside for the year 2009, so as to absorb the negative consequences of this crisis.

Abyaar's general assembly meeting approved the Company's capital increase from KD78,471,848 to KD106,727,500 through a new rights issue at a nominal value of 100 fils per share, plus an issue premium of 3 fils per share and issue expenses of 2 fils per share. This capital increase will be called on in one payment, and will be allocated to existing shareholders, each pro rata his existing share.

New shareholders may be admitted after the lapse of the legal period for subscription by existing shareholders. The general assembly meeting authorized the Board of Directors to set up the rules and conditions for calling on the capital increase.

The general assembly also agreed to compensate the shareholders, who subscribed to the capital increase based on the resolutions of the ordinary and extraordinary general assembly meetings held on 16/12/2008, through additional shares, or in cash at the rate of 20 fils per each subscribed share, and authorized the Board of Directors to set up the rules controlling such compensation.

Abyaar's Vice President & Managing Director Mr. Marzouq Al-Rashdan said: "The Company's main objective is to complete the projects under construction. Towards this end, Abyaar has recently signed a finance agreement for KD19m with one of the local banks for the purpose of completing these projects."

"The time period agreed upon for the finance deal is 5 years, where the funds will be received in the light of each project completion. This finance has been accorded to Abyaar against real estate mortgage collaterals, which value exceeds the loan amount. The lending bank's belief in the strong performance of the Company and its operational activities, focusing on developing real estate assets generating fixed operating income, was crucial in the success of this financing deal"

Al-Rashdan explained.

With regard to Abyaar's settlement of its financial obligations, Al-Rashdan clarified that the Company managed to settle, repay and reschedule more than 50% of its local and foreign financial obligations, whether due or not yet due, explaining that the conservative market value of the Company's projects under construction exceeds their book value by 30%.

"The share of the Company is witnessing daily intensive trading by some portfolios, aimed at buying and compiling our share at its current prices levels, as the share is traded below its book value, which stood at 180 fils as of the end of March 2009, while its current market value is 112 fils according to last week closings", Al-Rashdan added.

On the other hand, Al-Rashdan expected the Company to post good results for the second quarter of the current year, exceeding the profits achieved in the first quarter.

Talking about the actual date for offering the capital increase for subscription, Al-Rashdan said:" We look forward to offer the new rights issue for subscription to existing shareholders by the beginning of next week, as we are in the process of completing all relevant official formalities."

"Abyaar's total assets equal an amount of KD230m, while their conservative market value equals KD480m, in contrast to Abyaar's loans and financial obligations which represent 30% of its assets - which is a low debt/ assets ratio measured by the standards of the real estate development market.", Al-Rashdan concluded.