The Mediterranean and Gulf  Insurance and Reinsurance Co.’s (MedGulf) general assembly has approved a 60 percent capital reduction to SAR 400 million from SAR 1 billion, to restructure capital in line with the new companies law and to offset accumulated losses.

 

The capital cut will not affect the company’s liabilities, the insurer said in a statement on Tadawul.

 

The capital cut would apply to all shareholders of record on the day of the general assembly and those registered at the Securities Depository Center two days after this date.

 

In a separate statement, Saudi Stock Exchange said trading in MedGulf stock will be suspended for two business days starting from Monday Sept. 25, until the Securities Depository Center Company (Edaa) adjusts the shares reduction on investors’ portfolios. The suspension will be lifted at the end of trading on Tuesday Sept. 26.

 

Tadawul has set the fluctuation limits for MedGulf based on a share price of SAR 31.60.

 

Capital reduction details

Current Capital

SAR 1 billion

Number of shares

100 mln shares

Capital cut percent

60% (6 share for every 10 shares)

New capital

SAR 400 mln

New number of shares

40 mln shares

Method of capital cut

Writing off 60 mln shares

Reasons

Restructuring the company’s capital and to offset accumulated losses

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