Shareholders of Islamic Arab Insurance Company (Salama), one of the UAE's leading takaful providers, have approved a capital reduction and subsequent capital increase as part of a comprehensive plan to restore solvency and reinforce its financial position in line with regulatory requirements of the Central Bank of the UAE (CBUAE).
At a general assembly held on 16 October 2025, shareholders approved a capital reduction to offset accumulated losses and cancel treasury shares.
Following completion and final approval by the Securities and Commodities Authority (SCA), Salama will proceed, through a special purpose vehicle, with the issuance of up to AED175m ($47.7m) in Mandatory Convertible Sukuk (MCS) to a select group of strategic investors. The sukuk will be mandatorily converted/exchanged into new shares under the approved terms.
This capital restructuring marks a critical milestone in Salama’s ongoing efforts to reinforce solvency, ensure full regulatory compliance and provide a stable foundation for future operations.
Mr Mohamed Ali Bouabane, group CEO of Salama, said, “The approval of our capital restructuring plan marks an important step toward strengthening Salama’s balance sheet and meeting all regulatory capital requirements. The continued support of our shareholders and strategic investors reflects strong confidence in the company’s fundamentals and long-term stability.
He said, “Looking ahead, our focus will remain on generating tangible value for shareholders by maintaining strong underwriting discipline, optimising our expense base, strategically deploying capital and delivering superior claims service, ensuring Salama remains a simpler, leaner and more resilient organisation.”
The new capital will strengthen Salama’s solvency position and ensure compliance with the capital requirements of the Central Bank of the UAE, while supporting its well-diversified portfolio across product lines and geographies, providing stability and multiple avenues for sustainable growth.
Salama reported steady financial improvement in the first half of 2025, with total equity rising to AED351.84m, a 5.2% increase compared to the previous year. The company also achieved a net profit of AED8.25m and takaful revenue of AED515.36m in 1H2025, demonstrating disciplined operations and improved financial performance.
S&P Global Ratings recently affirmed Salama’s long-term issuer credit and insurer financial strength rating at ‘BBB-’ with a “Developing” outlook, highlighting the company’s improving fundamentals and progress toward a stronger capital position.