Saudi Re recommends capital cut to offset losses

Saudi Re for Cooperative Reinsurance Co.’s board of directors has recommended a 19.6 percent capital reduction to SAR 804 million, to restructure the company’s capital and offset accumulated losses, the insurer said in a statement on Tadawul.

Shareholders of record at the general assembly meeting day, and those who are registered at the Securities Depository Center two days after the general assembly meeting, are eligible for the capital cut, the company added.

The capital cut is conditional upon obtaining regulatory approvals.

The company’s liabilities will not be affected by the capital cut process, Saudi Re added.

Shareholders’ ownership ratios will remain unchanged after the capital cut.

Earlier this year, the Saudi market regulator, the Capital Market Authority (CMA), said Tadawul-listed companies that have accumulated losses exceeding 50 percent of their capital will be forced into liquidation under a new corporate law, unless they fix their finances.