Saudi Enaya Cooperative Insurance has received approval from the Capital Market Authority (CMA) to increase its capital through a rights issue.
The additional capital to be raised is SAR150m ($40m), according to a statement posted on the CMA website. The increase will take the insurer’s total issued capital to SAR380m. The company's board proposed on 10 December 2023 the rights issue to increase the capital by SAR150m.
Previously, Saudi Enaya announced that it has received the Insurance Authority’s approval to rehabilitate the company for one year from 22 July 2024 to 21 July 2025.
UCA
Separately, United Cooperative Assurance (UCA) said that its board had decided to cancel a recommendation made on 11 December 2023 to increase its capital by SAR300m.
UCA said in a bourse disclosure, “The board has decided at this current stage to cancel its recommendation and to consider adjusting the capital at a later stage.”
The now-aborted capital increase would have resulted in an issued capital of SAR700m. The objective was to restructure the company’s capital and write accumulated losses. UCA’s capital losses amounted to SAR175.3m as of 30 June 2924, down from SAR180.6m as of 31 December 2023. The insurer posted a net profit of SAR5.3m for 1H2024 which followed full-year profits of SAR5.3m in 2023. The accumulated losses were largely due to huge net losses in the COVID-19 pandemic years. The insurer reported net losses amounting to SAR42.9m in 2022, SAR73.7m in 2021, and SAR43.9m in 2020.
In December 2023, UCA shareholders approved a proposed merger with Saudi Enaya through a share swap offer. However, Saudi Enaya shareholders rejected the merger proposal.
In January 2022, Saudi Enaya shareholders objected to a proposed merger with Amana Cooperative Insurance whose shareholders approved the proposal.
Gulf General
Another insurer, Gulf General Cooperative Insurance, announced on 29 August 2024 that its board had decided to cancel a recommendation made in March 2024 for a capital increase of SAR300m through a right issue.
In a statement lodged with Tadawul, Gulf General said, “This decision was made to direct the company’s efforts and resources towards the success of the merger process with the Gulf Union Cooperative Insurance Company. The board of directors believes that this decision will enhance the company’s competitive position, operational efficiency, and overall performance in the market, ultimately serving the interests of all stakeholders.”
In August, Gulf General announced the signing of a Memorandum of Understanding with Gulf Union Al Ahlia Cooperative Insurance to evaluate a potential merger between the two companies.
In March 2024, shareholders of Gulf General approved the board’s proposal to cut capital by 40% from SAR500m to SAR300m by cancelling 20m shares. This capital restructuring exercise was undertaken for the company to offset SAR200m in accumulated losses.