UAE's First Gulf Bank to issue bonus shares from buyback plan

UAE’s First Gulf Bank to issue bonus shares from buyback plan

The board has proposed to distribute the 75 million shares of the bank as bonus shares.

January 7, 2011 12:01 by Reuters

First Gulf Bank said on Thursday it plans to distribute 75 million shares bought under its buyback programme as bonus shares, in a move to benefit its shareholders.

The board has proposed to distribute the 75 million shares of the bank as bonus shares, the bank said in a statement.

FGB initiated the share buyback programme in early 2009 to counter poor trading due to weak market sentiment and improve liquidity.

The move is subject to approval by the competent authorities and the annual general meeting, the statement said.

The shares buyback law stipulates that a listed company can keep them as treasury shares and cancel or sell them after a certain period.

“We did not want to sell the shares, we decided to give back this advantage to the shareholders in the form of bonus shares,” a bank official told Reuters.

It is the first time that a company is distributing shares bought under its buyback programme as bonus shares to its own shareholders.

(Reporting by Stanley Carvalho)