Salama rights trading, new shares subscription start today

Logo of Salama Cooperative Insurance Co.

Salama Cooperative Insurance Co.’s rights issue trading and subscription to the new shares began today, Dec. 17, according to a statement to Tadawul.

Rights trading will end on Dec. 24, while subscription to new shares will close on Dec. 29.

For More IPOs

The insurer intends to offer 10 million shares, at SAR 10 each, via a SAR 100 million rights issue to increase capital by 50% from SAR 200 million to SAR 300 million.

The capital increase will help support the insurer’s future plans, enhance financial solvency margin, boost statutory reserve, and fulfill the requirements of capital.

The Capital Market Authority (CMA) approved in September the company’s request to increase capital via a rights issue.

Salama shareholders recently approved the board’s recommendation to raise capital by SAR 100 million rights issue (one share for every two existing shares).

Rights holders are allowed to exercise their right to subscribe to new shares (wholly or partly) up to the number of rights issues available in their portfolios.

The unsubscribed and fractional shares, if any, will be offered to institutional investors, according to the prospectus. Alawwal Capital will underwrite the rights issue if the entire subscription is not fully covered.

Investors not willing to subscribe must sell their rights during the specified trading period to avoid the decline in the value of their investment portfolios as a result of not benefiting from their rights, whether by way of sale or subscription.