Saudi Indian Company for Cooperative Insurance’s (Wafa Insurance) board of directors on April 1 recommended cutting capital by 18.03 percent to SAR 100 million from SAR 122 million (0.541 shares for every three outstanding shares).

 

The capital reduction aims to restructure capital in order to offset the accumulated losses and support the firm’s future growth, the insurer said in a statement to Tadawul.

 

Shareholders’ ownership will remain unchanged after the capital cut, Wafa Insurance added.

 

Following that, the board recommended a capital hike of SAR 100 million through rights issue.

 

The rights issue details will be determined by an extraordinary general assembly meeting that will be set later.

 

The move aims to support the insurer’s future growth and boost solvency margin.

 

Both recommendations are pending shareholder and regulatory approval, the statement added.

 

Capital Reduction Details

Current Capital

SAR 122 mln

Number of shares

12.2 mln shares

Capital cut percent

18.03% (0.541share for every 3 shares)

New capital

SAR 100 mln

New number of shares

10 mln shares

Method of capital cut

Cancelling 2.2 mln shares

Reasons

Restructure the company’s capital to offset accumulated losses

Impact on liabilities

No significant impact

 

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