Takaful News - UAE: Takaful Emarat's rights issue raises AED50 mln
Source: Middle East Insurance Review | Jan 2016
Takaful Emarat, the Dubai-listed, Shariah-compliant life and health insurer, has successfully raised AED50 million (US$13.6 million) during the first tradable rights issue for a takaful company in the UAE.
The rights issue, which was launched on 1 November and closed on 12 December, was 36.51% oversubscribed, with AED68.257 million in shares fully subscribed. The proceeds of the oversubscribed shares will be refunded to the shareholders after allocation of shares starting from 20 December, and the new shares will be listed on the Dubai Financial Market (DFM) following approval from the Securities & Commodities Authority (SCA).
Proceeds from the rights issue will be used to capitalise on the company’s recent restructuring under a new management team and its return to operating a profitable underwriting model. The new capital will be used to strengthen Takaful Emarat’s back office function, and grow and develop its distribution channels and sales network across the UAE, in particular in the Northern Emirates. The capital will also be invested in the company’s digital and interactive client service technologies to ensure optimal customer service and efficient policy management. In addition, the funds will be used to streamline Takaful Emarat’s investment, ensuring a more stable and predictable income and return on investment.
Takaful Emarat’s CEO Wael Al-Sharif said: “As a business, we have excelled with this rights issue, successfully raising AED50 million with strong shareholder support despite volatile markets. Takaful Emarat has delivered significant progress to date both from a financial and customer acquisition perspective as we continue to expand our distribution channels and physical presence across the UAE. We are now uniquely well positioned to continue our growth trajectory as we focus on delivering maximum value for our shareholders and investors.”
For the first nine months of 2015, Takaful Emarat saw earned contributions increase 229% y-o-y to AED270.2 million, and net takaful income increase 110% to AED27.3 million. Net operating income fell by 76% to AED1.3 million due to a drop in investment income, as a result of market volatility.
AED1 = US$0.27