17 June 2013
Muscat: Al Madina Insurance Company is planning to float an initial public offering (IPO) in the fourth quarter of this year in an attempt to change its status to a Sharia-compliant takaful firm. As per the draft takaful regulation, insurance companies have to be public firms to function as takaful companies.
The company's board has recently approved a proposal to float an issue, Abdul Rahman Barham, chief executive officer of Al Madina Real Estate -- a member firm of Al Madia group -- told Times of Oman.
He said the promoters will divest 40 per cent of their holding in the company in favour of investing public through the IPO, which will be a premium issue.
Al Madina Insurance, which has branch operations in several parts of the country, has a capital base of OMR10 million.
The company offers a wide range of insurance coverage, including motor, marine cargo and hull, life and medical, engineering, general accident, travel and housemaid insurance. Al Madina will be the fourth company to float an IPO, close on the heels of similar proposals from Al Maha Ceramics, Sembcorp Salalah Power and Oman Arab Bank, before the end of this year.
The first company to come out with the initial public offering is Al Maha Ceramics, whose stakeholders are planning to divest 40 per cent of their holding in the company, which is expected after Ramadan.
Sembcorp Salalah Power and Water Company, which owns and operates the $1 billion Salalah independent water and power project, is also planning to float an initial public offering this year.
Similarly, two partners of Oman Arab Bank (OAB) -- Oman International Development and Investment Company (Ominvest) and Arab Bank -- are planning to divest their holding via private placement and an initial public offering.
Ominvest is planning to divest a part of their stake in OAB through a private placement, and divest 21 per cent holding in the bank through an initial public offering. Bahrain-based Arab Bank, the second partner of OAB, will divest four per cent stake in the bank in favour of investing public, taking the total divestment via IPO route to 25 per cent.
Barham said that Al Madina has received an 'in principle' approval from the Capital Market Authority for converting its status into an Islamic insurance firm and a final approval will be given only after the company lists its shares on the Muscat Securities Market (MSM).
According to takaful draft regulation, a standalone company has to be formed for Sharia-compliant takaful insurance business, which is against window operations to be allowed in the banking sector. Further, the minimum capital proposed for a takaful company is envisaged at OMR10 million and it needs to have a three-member board.
A conventional insurance company planning to enter takaful business has to seek a separate licence and form a separate company. The CMA has so far given 'in principle' approvals to three companies, including a joint venture of ONIC Holding, for promoting takaful insurance firms. ONIC Holding is investing in Takaful Oman, as one of the founding shareholders. The initial capital of the new company is OMR10 million and ONIC Holding will hold a 7.5 per cent shareholding.
Muscat: Al Madina Insurance Company is planning to float an initial public offering (IPO) in the fourth quarter of this year in an attempt to change its status to a Sharia-compliant takaful firm. As per the draft takaful regulation, insurance companies have to be public firms to function as takaful companies.
The company's board has recently approved a proposal to float an issue, Abdul Rahman Barham, chief executive officer of Al Madina Real Estate -- a member firm of Al Madia group -- told Times of Oman.
He said the promoters will divest 40 per cent of their holding in the company in favour of investing public through the IPO, which will be a premium issue.
Al Madina Insurance, which has branch operations in several parts of the country, has a capital base of OMR10 million.
The company offers a wide range of insurance coverage, including motor, marine cargo and hull, life and medical, engineering, general accident, travel and housemaid insurance. Al Madina will be the fourth company to float an IPO, close on the heels of similar proposals from Al Maha Ceramics, Sembcorp Salalah Power and Oman Arab Bank, before the end of this year.
The first company to come out with the initial public offering is Al Maha Ceramics, whose stakeholders are planning to divest 40 per cent of their holding in the company, which is expected after Ramadan.
Sembcorp Salalah Power and Water Company, which owns and operates the $1 billion Salalah independent water and power project, is also planning to float an initial public offering this year.
Similarly, two partners of Oman Arab Bank (OAB) -- Oman International Development and Investment Company (Ominvest) and Arab Bank -- are planning to divest their holding via private placement and an initial public offering.
Ominvest is planning to divest a part of their stake in OAB through a private placement, and divest 21 per cent holding in the bank through an initial public offering. Bahrain-based Arab Bank, the second partner of OAB, will divest four per cent stake in the bank in favour of investing public, taking the total divestment via IPO route to 25 per cent.
Barham said that Al Madina has received an 'in principle' approval from the Capital Market Authority for converting its status into an Islamic insurance firm and a final approval will be given only after the company lists its shares on the Muscat Securities Market (MSM).
According to takaful draft regulation, a standalone company has to be formed for Sharia-compliant takaful insurance business, which is against window operations to be allowed in the banking sector. Further, the minimum capital proposed for a takaful company is envisaged at OMR10 million and it needs to have a three-member board.
A conventional insurance company planning to enter takaful business has to seek a separate licence and form a separate company. The CMA has so far given 'in principle' approvals to three companies, including a joint venture of ONIC Holding, for promoting takaful insurance firms. ONIC Holding is investing in Takaful Oman, as one of the founding shareholders. The initial capital of the new company is OMR10 million and ONIC Holding will hold a 7.5 per cent shareholding.
© Times of Oman 2013
