PIF signs MoU to subscribe to new cash shares in Saudi Re via capital hike

Logo of Saudi Reinsurance Co. (Saudi Re)

Saudi Reinsurance Co. (Saudi Re) signed on Oct. 7 a non-binding memorandum of understanding (MoU) with the Public Investment Fund (PIF), under which the fund will subscribe to new cash shares in the former by way of capital increase while suspending preemptive rights of the current shareholders.

The PIF will subscribe to new cash shares, which represent a significant minority in Saudi Re at SAR 16 per share, Saudi Re said in a statement to Tadawul.

Al Rajhi Capital and GIB Capital were mandated as advisors for Saudi Re and the Kingdom’s sovereign wealth fund, respectively.

The transaction is subject to the conclusion of the subscription agreement by Saudi Re and PIF. The proposed transaction is also conditional of the absence of any change in the CEO position or any other position in Saudi Re’s executive management.

The terms and conditions of the subscription agreement will include obtaining all the required regulatory approvals, including the Capital Market Authority (CMA), the Saudi Central Bank (SAMA), and Saudi Re’s extraordinary general meeting.

Further, Saudi Re and PIF shall cooperate to negotiate in good faith to enter into the subscription agreement, the statement added.

The MoU will expire within three months from the date of signing, unless extended by both parties by prior written agreement, or a binding subscription agreement is concluded, or if they decide to terminate the MoU, or after 15 days from the date on which PIF notifies Saudi Re in writing of its desire to cease the negotiations and not to proceed with the transaction, whichever is earlier.

The financial impact will be announced in due course, Saudi Re added.

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