Riyadh - Mubasher: The board of the Allied Cooperative Insurance Group (ACIG) has recommended reducing the company’s capital by 29.5% from SAR 200 million to SAR 141 million then raising the capital by SAR 150 million.
The aim is to offset accumulated losses, through the cancellation of 5.9 million shares, according to the company’s statement to the Saudi Stock Exchange (Tadawul) on Thursday.
Furthermore, the board of directors has recommended a capital hike, following the capital reduction, through a rights issue valued at SAR 150 million.
ACIG will appoint a financial advisor to manage the capital cut, which is subject to the approval of the Capital Market Authority (CMA), Saudi Arabian Monetary Authority (SAMA), and the company’s extraordinary general assembly meeting (EGM).
Last November, ACIG received a letter from SAMA obligating the company to insurance group to raise its statutory deposit ratio to 15% of its capital, due to the decline of the company’s solvency ratio, below the required level, by the end of the third quarter (Q3) of 2019.
Accumulated losses amounted to SAR 59.59 million, representing 29.8% of its SAR 200-million capital.