Riyadh – Mubasher: Mediterranean and Gulf Cooperative Insurance and Reinsurance’s (Medgulf) board of directors on Wednesday authorised the extraordinary general meeting (EGM) to reduce its capital to SAR 400 million, from SAR 1 billion.

The capital decrease will take place through cancelling 60 million shares, according to the company's statement to the Saudi Stock Exchange (Tadawul).

The capital reduction is attributed to adjusting the company's financial situation to cover the accumulated losses, Medgulf added, noting that its financial commitments will not be impacted.

The capital decrease is subject to the approval of the official authorities and the firm’s EGM. In case of approval, the capital reduction will be effective from the second trading day following the maturity date which will be specified later.

The ownership ratios of each shareholder will not be changed.

In a separate statement, the Tadawul-listed firm announced appointing Saudi Fransi Capital as a financial counselor to manage the capital reduction process.

Medgulf’s stock shed 0.16%, closing at SAR 12.80 on Wednesday.