UK lender to invest $16m in Rasmala

European Islamic Investment Bank plans to invest US$16 million (Dh58.7m) in Rasmala Holdings as the two banks develop a strategic partnership.

European Islamic Investment Bank (EIIB) plans to invest US$16 million (Dh58.7m) in Rasmala Holdings as a first step in building a partnership with the Dubai investment bank.

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EIIB wants to use the deal to give investors exposure to the Gulf region. Rasmala will use the cash to capture market share in its key markets over the next two years, said Ali Al Shihabi, the chairman of Rasmala.

"Rasmala has a strong regional franchise, and together with EIIB's international capital markets and asset management experience this will be a powerful partnership to seize current opportunities in the GCC," said Zulfi-Carr Hydari, the chief executive of EIIB, based in London. Rasmala forecast a loss of about $7m before interest, tax, depreciation, amortisation and restructuring for the financial year that ended on December 31 last year, EIIB said.

But the lender said it had recently pushed ahead with cost-cutting and restructuring initiatives that will improve its performance this year.

The $16bn will be invested over 12 months as EIIB converts a financing facility into Rasmala shares valued at 35 per cent of the brokerage's outstanding stock, EIIB said on Friday.

The deal also involves EIIB acquiring 7.4 per cent of Rasmala stock from Mr Al Shihabi in exchange for £3.5m (Dh19.8m) of its own shares, the company said.

Rasmala has also issued to EIIB a majority of management shares, enabling the bank to take a leading role in its management, including the right to appoint the majority of the board of directors.

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