Shareholders of Allied Cooperative Insurance Group (ACIG) will vote on a 29.5% capital cut from SAR 200 million to SAR 141 million to offset accumulated losses during the extraordinary general meeting scheduled for August 26. 

 

The company said in a circular that a total of 5.9 million shares will be cancelled (1 share for every 3.3898 shares) to offset 99% of accumulated losses.  

 

Fractional shares, if any, will be collected in one portfolio to be sold at market price at the time. The proceeds will be distributed to the eligible shareholders pro rata, within 30 days from the extraordinary general meeting date. 

 

The company’s board aimed to develop a strategy for future growth and the company’s financial performance. The board reached a decision on restructuring the company’s capital through capital reduction, followed by a rights issue to improve financial solvency and offset accumulated losses.

 

Stock Price and Market Value Following Capital Decrease

Stock closing price before capital cut (Hypothetical)

SAR 20.44

Capital cut value

SAR 59 mln

Number of shares canceled

5.90  mln shares

Number of shares outstanding and issued before capital cut

20  mln shares

Number of shares outstanding and issued after capital cut

14.10 mln shares

Market value of shares before capital cut

SAR 408.8  mln

Stock price following the capital cut (est.)

SAR 28.99

 

Impact of Capital Decrease on Eligible Shareholders with 1,000  Shares Portfolio

Shares held before capital cut

1,000 shares

Closing price before capital cut (Hypothetical)

SAR 20.44

Market value of shares before capital cut (Hypothetical)

SAR 20,440

Capital cut (%)

29.50%

Number of shares canceled

259 shares

Number of shares held after capital cut

705 shares

Stock price following the capital cut (est.)

SAR 28.99

Market value of shares after capital cut (est.)

SAR 20,438

Compensation from fractional shares (est.)

SAR 2.05

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