El-Quqa : Global lead manages the capital increase of Al-Waseela Real Estate Development Projects Co.

The company is Sharia'a complaint Real Estate developer.

Mr. Omar M. El-Quqa, Executive Vice President- Corporate Finance & Treasury at Global said that the paid-up capital will be increased to KD32.7 million through the issuance of additional 126.6 million shares at a sale price of 158 Fils per share (100 Fils as par value and 58 Fils as premium). This is to raise a total of KD20 million (KD12.7 million as paid-up capital and KD7.3 million as placement premium) he added.

It is worth mentioning that the founders of the company have waived their pre-emptive rights to subscribe in the capital increase. All proceeds from capital increase will be invested in developing Al-Waseela project in Al-Ardiya."

Mr. El-Quqa said that the company is expected to achieve a net income of KD2.151 million for the first year of project operation. It is also expected that Al-Waseela Real Estate Development Projects Company will report return on average assets and return on average equity of 3.5% and 5.4% in the first year respectively, growing gradually to 19.3% and 22.7% in the twentieth year.

Furthermore, based on the market analysis, expected demand, and financial assumptions made, the Internal Rate of Return (IRR) for Al-Waseela is estimated to be 16.7% for new shareholders. However, it must be noted that these assumptions only consider that the company will undertake a single project, Mr. El-Quqa pointed.

Speaking about the company's current projects, Mr. El-Quqa explained, "Al-Waseela Real Estate Development Projects Company has already obtained a 150,000sqm land in Al-Ardhiya and will develop a project that will provide workspaces and showrooms to young Kuwaitis at subsidized rents plus common workshops with equipments and technicians free of charge for the tenants."

"The project will also include some areas that are available for rent by other people not meeting the entering criteria in addition to a commercial shopping mall, which was identified as a complement to the industrial complex," he said.

These two components were meant to generate funds, which would allow Al-Waseela Company to operate the industrial complex and to provide for a stream of return on the shareholders' investments, Mr. El-Quqa concluded.