Wafa Insurance eyes mergers after capital restructuring: Chairman

Saudi Indian Company for Cooperative Insurance (Wafa Insurance) will eye mergers and acquisitions (M&As), after restructuring its capital and boosting its solvency, board chairman Majid Al-Suwaigh told CNBC Arabia.
 

The company is seeking to increase capital to offset its losses and resume operations.
 

Talks are ongoing with the regulatory authorities to set the percentage of offsetting losses, Al-Suwaigh noted, adding that Wafa Insurance is still discussing this issue with the Capital Market Authority (CMA) and the Saudi Central Bank (SAMA).
 

Wafa is also explaining the board of directors’ view, as it is studying the participation of new investors in the company, especially those having commercial projects as they can provide new contracts for the insurer.
 

The company's board of directors recommended last Thursday a capital hike through a SAR 300 million rights issue. The capital hike aims to enhance solvency margin and support the company to resume its insurance operations.
 

Subscription could be divided between the existing shareholders and new investors. Talks with investors will take place directly by the board of directors or the bankruptcy agent.
 

The company’s accumulated losses reached SAR 207.64 million representing 207.64% of capital, as per the last disclosed financial results for the first nine months of 2019. Losses were attributed to loss from operations and halting sales.