Du plans US$272 million rights issue May 27

Emirates Integrated Telecommunications Company (Du) announced today that it proposes to raise AED 1 billion (US$272 million) through a rights issue. The capital raised will fund an accelerated growth strategy.

An Extraordinary General Meeting (‘EGM’) will be held on May 11 to approve the increase in the company’s share capital and the issue of new shares to shareholders on a pro rata basis. The rights issue subscription period is expected to start on May 27 and end on June 8. The subscription price will be determined by the board on or about May 11, subject to final approval by shareholders at the EGM, at a price of up to AED 1.91 per new share.

Transaction rationale

· Deliver on commitment to customers by continuing to enhance network capabilities and expand fixed and mobile infrastructure;

· Invest in the next phase of growth by accelerating Du’s capital expenditure programme to become the preferred integrated telecommunications provider in the UAE; and

· Transform the company from a high growth early stage venture to a more mature company with efficient management of future funding requirements.

The founding shareholders of Du (Emirates Investment Authority, Mubadala Development Company and Emirates Communications and Technology LLC), holding approximately 80 per cent of the company, fully support the rights issue and have agreed to vote in favour of the resolutions to be proposed at the EGM. The founding shareholders have also agreed to take up their rights in full and oversubscribe for any new shares remaining after all other shareholders have had the opportunity to take up their rights and oversubscribe for additional new shares.

JP Morgan is acting as rights issue co-ordinator and bookrunner and Mashreqbank is acting as lead receiving bank for the rights issue.