Saudi Reinsurance seals binding subscription agreement with PIF

Logo of Saudi Reinsurance Co.

Saudi Reinsurance Co. (Saudi Re) inked, on July 4, a binding subscription agreement with the Public Investment Fund (PIF), according to a statement to Tadawul.

 

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As part of the subscription agreement, the insurer will increase its capital from SAR 891 million to SAR 1.15 billion, while suspending the pre-emptive rights.

 

PIF will fully subscribe to the new shares, bringing its ownership in the company to 23.08% after the capital hike.

 

Saudi Re’s board of directors recommended a capital increase by issuing 26.73 million new ordinary shares, representing 30% of its current capital, at a nominal value of SAR 10 per share, at an offering price of SAR 16 per share, totaling SAR 427.68 million.

 

Capital Increase Details

Current Capital

SAR 891 mln

Number of Shares

89.1 mln

Percentage of Increase

30%

New Capital

SAR 1.15 bln

Number of Shares

115.83 mln

Number of New Shares

26.73 mln

Offering Price

SAR 16 per new share

Total Subscription Amount

SAR 427.68 mln

Reasons

Boost the company’s growth and financial position

Target

PIF will fully subscribe to the new shares, bringing its ownership to 23.08% after the capital hike

Record Date

Shareholders of record on the date of the extraordinary general meeting (EGM) when the capital increase via share issue will be approved. Subscription will be confined to the new share.
 

In full consideration of issuing the new shares, PIF will pay the company a subscription of SAR 16 per each new share, for a total subscription of SAR 427.68 million, subject to the non-objection of the Insurance Authority (IA) and the approval of the Capital Market Authority (CMA).

 

The capital increase is subject to approvals from other competent authorities such as the Saudi Exchange (Tadawul), EGM, as well as other internal approvals from PIF.

 

Upon completion of the capital increase, Saudi Re shall follow the necessary procedures to appoint three board members to be nominated by the PIF.

 

The insurer will duly announce filing for the CMA approval on the capital hike.

 

Al Rajhi Capital will be the financial advisor for Saudi Re, while GIB Capital will be the financial advisor for the PIF.

 

The PIF is not a related party in the deal, the statement added.

 

Saudi Re signed, on Oct. 7, a non-binding MoU with the PIF, under which the sovereign fund will subscribe to new cash shares in the former by way of capital increase while suspending pre-emptive rights of the current shareholders, Argaam reported.

 

The insurer agreed, on Dec. 25, with PIF to extend the MoU  previously signed for subscription to new cash shares for addition six months starting Jan. 7, 2024.

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