MEDGULF Issues Prospectus for 50% Capital Increase

The Mediterranean and Gulf Insurance and Reinsurance Company (MEDGULF) issued the prospectus for its planned 50 percent capital increase, aimed at boosting solvency and leveraging business expansion opportunities.

The company announced plans to increase its capital to one billion and fifty million (1,050,000,000) Saudi riyals from seven hundred million (700,000,000) riyals, by offering 35 million new ordinary shares through a rights issue at an offer price of 12 Saudi riyals, and a nominal value of ten riyals per share.

Having secured regulatory approval from the Saudi Capital Market Authority (CMA) on September 30, 2021, the company marked November 3rd as date for extraordinary general assembly meeting to discuss the offering. MEDGULF appointed SNB Capital as financial advisor, lead manager, and underwriter for the offering.

The company noted in the prospectus, the blueprint encompassing the details of the offering, that if the capital increase gets the nod of the general assembly; shareholders of record at the end of the trading period on the day of the EGM and who are registered in the company’s shareholders’ register at the Depository Center Company at the end of the second trading day following the EGA meeting, will be eligible to subscribe to the new shares.

MEDGULF unveiled that net proceeds from the offering will be used to boost its solvency position in response to regulatory requirements, and pursue business plans. Up to 15.9% of proceeds will be invested in information technology applications with focus on business development, sales generation and customer service, the company noted in the prospectus blueprint.

A major player in the insurance industry of Saudi Arabia, MEDGULF offers a broad range of products via three business divisions: health, motor and general insurance. Health insurance is the largest business division, representing 72% of gross premiums as on December 31, 2020, followed by motor insurance (17%) and general insurance (11%).

MEDGULF invites its esteemed shareholders and interested investors to review the rights issue prospectus for details about the offering.