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Sohar International eyes merger with HSBC Oman

18 Jun 2022

Muscat – Sohar International Bank has shown its intention to explore the possibility of a merger with HSBC Bank Oman.

‘The board of directors of Sohar International Bank in its meeting on June 15 resolved to send a letter of intent to the board of directors of HSBC Bank Oman to explore the possibility of a merger between the two entities,’ Sohar International Bank said in a disclosure to the Muscat Stock Exchange on Thursday.

As per the disclosure, the merger deal would involve HSBC Bank Oman shareholders being offered cash and shares – subject to obtaining final approvals from the respective boards, regulators and shareholders.

In November 2021, Sohar International initiated merger talks with Bank Nizwa too. In January, Sohar International and Bank Nizwa both received the approval from the Central Bank of Oman (CBO) to start the due diligence process for a merger between the two entities.

Clarifying on the proposed merger with Bank Nizwa, Sohar International in its disclosure on Thursday confirmed that the proposed merger process with Bank Nizwa is ‘in progress’ as announced earlier.

The bank said, ‘Sohar International remains committed to pursue the proposed merger (with Bank Nizwa) and envisage finalising the due diligence at the earliest.’
‘Each of the proposed merger transactions with Bank Nizwa and HSBC Bank Oman are subject to regulatory and shareholders’ approvals,’ Sohar International added.

Capital raising plan
The board of directors of Sohar International Bank also resolved to boost the bank’s capital to support its strategic growth, according to a separate disclosure filed by the bank to the Muscat Stock Exchange on Thursday.

Under the capital planning, Sohar International’s board of directors approved to raise the bank’s CET 1 capital by offering rights issue worth RO160mn. To enhance the bank’s Tier 1 capital, the board of directors also resolved to issue RO50mn worth of perpetual capital securities with a green-shoe option of RO25mn.

‘The proposed transactions and pursuant issuances will be subject to the regulatory and shareholders’ approvals,’ Sohar International noted in the disclosure.

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