BMB Investment Bank rights offering concludes - private placement begins

A total of over US $35.5 million has been raised so far, representing 71% of the initial rights offering.

This first stage of capital raising, which saw on offer to the Bank's existing shareholders 200,000,000 ordinary shares with a par value of US $0.25 per share, representing US $50 million, closed on Sunday July 3rd. The second stage of the capital raising, which is already generating strong interest, begins on July 11th whereby an additional US $50 million may be raised through private placement and a debt for equity conversion. The total of the two stages, coupled with a US $20 million medium term secured liquidity facility obtained in 2003, will provide a solid capital base upon which the Bank can rebuild its business.

The private placement will conclude on July 25th, after which new share certificates will be issued on August 31st ahead of the resumption of trading in the Bank's shares on the Bahrain Stock Exchange on September 4th.

In commenting on the rights offering, Shaikh Ali Jarrah Al-Sabah, Chairman, said:
"We are extremely pleased with the success of the rights offering and the confidence the shareholders have shown in the Bank. We look forward to completing the private placement and setting the Bank back on a solid footing."

Chief Executive Albert I Kittaneh added:
"We look forward to the time ahead as we are invigorated by this capital injection and the strong return to profitability evidenced in our first quarter results. We are extremely confident in the Bank's ability to continue to generate good returns from its investment portfolio."

Bahrain Middle East Bank (E.C.) was established as an Offshore Banking Unit in 1982. Although currently not trading, its shares are listed on the Bahrain Stock Exchange under (BMEB.BH).