Wafa Insurance recommends capital cut, amending activities to avoid liquidation

Saudi Indian Cooperative Insurance Co.’s (Wafa) board of directors has recommended a capital cut as well as changing the company’s activity to avoid dissolving the company, the insurer said in a bourse statement.

The recommendation came after the company failed to hire an underwriter for its proposed capital hike within budget.

Since the reduction of insurance companies’ capital below SAR 100 million is not permissible under the Insurance Companies Control Law and its Executive Regulations, the board recommended changing the company’s activity and cut the capital after obtaining the necessary regulatory approvals, the statement said.

However, this does not preclude the completion of capital hike procedures if an underwriter is secured in a timely manner, a possibility that the board of directors believes it can’t be achieved under the current circumstances, it added.

Last September, Wafa’s board recommended a SAR 220 million capital hike through a rights issue, Argaam reported earlier.