Arabia Insurance delays EGM to discuss capital increase on underwriter withdrawal

Logo of Arabia Insurance Cooperative Co. (AICC)

Arabia Insurance Cooperative Co. (AICC) postponed the extraordinary general assembly meeting (EGM) scheduled on Aug. 2 to vote on a rights issue to increase the company’s capital.

The EGM was postponed as AICC was notified by the underwriter, Alinma Investment Co., of its withdrawal of the underwriting commitment without any legal or regulatory justification or a material reason. Moreover, there is no material change in the company's business that led Alinma Investment to withdraw from coverage, the insurer said in a statement to Tadawul.

AICC added that it discussed the matter was Alinma Investment to try to dissuade them from the withdrawal decision for violating the financial advisory agreement signed between the two parties.

Accordingly, the capital increase item is incomplete to be presented to the assembly for voting. The EGM was, therefore, postponed until further notice and until the necessary regulatory procedures are completed.

On the other hand, AICC pointed to the soundness of its legal and regulatory position. The insurance services provider stressed that it will take all legal measures against all concerned parties to protect the interests of its shareholders and the company, claim all costs incurred and seek compensation for resulting damage.

The company will notify the shareholders of any major developments as soon as they occur, AICC concluded.

In May, the Capital Market Authority (CMA) approved AICC’s application to increase its capital through a rights issue worth SAR 265 million, Argaam reported.