June 3 (Reuters) - London-based European Islamic Investment Bank will seek shareholder approval for a tender offer of up to 20 million pounds of its own shares while seeking approval for a separate share buyback.
Last month, EIIB said it would propose a capital reduction plan to enhance returns for its shareholders, after the firm swung back into profit in the 2013 financial year. [nL6N0NU3BS
The tender offer would begin “as soon as possible” with an offer price of 5 pence per ordinary share, helping absorb excess cash reserves, the bank said in a bourse filing.
EIIB shares, which are listed in the London Stock Exchange Alternative Investment Market, closed at 3.65 pence on Monday.
The bank said it would also seek shareholder approval for a share buyback during its annual general meeting to be held on June 25, without giving an amount or timeframe.
EIIB is one of Britain’s six full-fledged Islamic banks and among 20 institutions in the country that offer sharia-compliant financial services, which follow religious principles such as a ban on interest and investing in gambling businesses.
Under its 2012-2016 strategy, EIIB is restructuring its business by exiting higher-risk private equity investments, seeking more stable income streams such as asset management and advisory services under its EIIB-Rasmala brand. (Editing by Eric Meijer)