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Saudi Arabia insurer Amana Cooperative Insurance Company is looking to cut its capital by nearly half to eliminate some of its accumulated losses.
As of September 30, 2020, the company’s losses amounted to more than 110 million Saudi riyals, representing 46 percent of its share capital.
In a statement to the Saudi Stock Exchange (Tadawul) on which its shares trade, the firm said its board of directors has recommended to call a non-general assembly to decrease its capital by 45.83 percent to 130 million Saudi riyals ($34.6 million).
The move will involve “writing off 11,000 shares, which is equivalent to one share for each 2.1818 shares”, the statement added.
“There is no material impact from reducing the capital on the company’s obligations, operational, financial or organisational performance. The ownership percentage of any shareholder will not change as a result of reducing the capital,” the company explained.
The company also confirmed that its executive management has appointed Alinma Investment Company as the financial advisor for the capital reduction.
It was earlier reported that the Saudi insurer is in talks with Saudi Enaya Cooperative Insurance for a possible merger.
The company had said that the accumulated losses was due to the increase in net claims incurred.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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© ZAWYA 2020
