MedGulf recommends 60% capital cut to offset losses

The board of Mediterranean and Gulf Insurance and Reinsurance Co. (MedGulf) has recommended on Wednesday cutting capital by 60 percent from SAR 1 billion (100 million shares) to SAR 400 million (40 million shares).

The move is aimed at restructuring the company’s capital and offsetting accumulated losses, the insurer said in a statement to Tadawul, on which it is listed.

Saudi Fransi Capital was hired as financial advisor for the proposed capital cut.

The company plans to write off 60 million of its outstanding shares, or 6-for-10, in line with new corporate law. 

The proposal is still pending regulatory approval and the go-ahead from the company’s extraordinary general assembly meeting, which will be held later on.

The move will not have a material impact on its liabilities. Shareholders’ stakes will also remain unchanged following the capital cut, MedGulf added.