CMA approves UCA capital hike to merge with Saudi Enaya

Logos of UCA and Saudi Enaya

The Capital Market Authority (CMA) approved United Cooperative Ansurance Co.'s (UCA) request to increase its capital from SAR 400 million to SAR 592.61 million by issuing 19.26 million ordinary shares, the market regulator said in a statement today, Oct. 30.

The move aims to merge Saudi Enaya Cooperative Insurance Co. with UCA, as well as transfer the former's assets and liabilities to the latter through a share swap deal.

The capital increase shareholder circular will be published within sufficient time before UCA's extraordinary general meeting (EGM), the CMA said, adding that the circular must include all relevant information that shareholders need to know before making an informed decision when voting on the move.

The CMA also approved the proposed offer timetable and the publication of the offer document by UCA to Saudi Enaya’s shareholders to merge the two insurers through a share swap deal.

The offer document of UCA will be published to Saudi Enaya’s shareholders within sufficient time before Saudi Enaya’s EGM. In addition, it must include all relevant information that shareholders need to know before making an informed decision when voting on the move, including the offer information and risk factors, according to the statement.

If UCA’s shareholders approve the capital increase and Saudi Enaya's shareholders accept the offer in their EGMs, the new shares will be issued to Saudi Enaya’s shareholders who are registered with the Securities Depository Center Co. (Edaa), and Saudi Enaya’s shares will be delisted from the Saudi Exchange (Tadawul).

The CMA urged shareholders to carefully read the circular and the offer document to make a proper voting decision, stressing that failure to do so may involve high risks.

The authority also called on shareholders to consult an authorized financial advisor if they found that the circular and offer document were difficult to understand.

In May, UCA and Saudi Enaya signed a binding merger agreement, as reported earlier by Argaam.

Both insurance service providers agreed to merge through a share swap deal, whereby UCA will issue 0.837 ordinary share for each issued share in Saudi Enaya for the benefit of eligible shareholders in Saudi Enaya.

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