Gulf General proposes capital hike after 58.7% capital cut

Gulf General Cooperative Insurance Co.’s stated that its board of directors recommended a 58.67% capital reduction from SAR 300 million to SAR 124 million, through the cancellation of 17.6 million shares.

According to a statement to Tadawul, the reduction is part of the proposed transaction with BlueFive Investments Holding Ltd, aimed at restructuring the company’s capital and offsetting accumulated losses.

The company added that the board subsequently recommended increasing the capital from SAR 124 million to SAR 300 million by issuing 17.6 million new shares at a nominal value of SAR 10 per share.

The capital hike will be carried out through issuing 12.6 million shares with the suspension of preemptive rights, which will be fully subscribed by BlueFive Insurance Arabia, a Saudi company under BlueFive Investments Holding Ltd. This is in addition to issuing 5 million shares through the conversion of debt provided by major shareholders.

The company said the capital increase with the suspension of preemptive rights will generate total proceeds of SAR 126 million, while the debt conversion will settle the major shareholders’ loan of SAR 50 million.

The proposed transaction is subject to obtaining the Insurance Authority’s non-objection, as well as the approval of the Capital Market Authority (CMA), Tadawul, and the General Authority for Competition, in addition to the extraordinary general meeting (EGM).

Details of Proposed Capital Changes