A Saudi administrative court issued a ruling in favor of Weqaya Takaful Insurance and Reinsurance Co. on canceling the decision of the Saudi Arabian Monetary Authority (SAMA), the Kingdom’s central bank, about rejecting the insurer’s capital hike request.
Weqaya filed a lawsuit against the SAMA, which rejected the company’s request for capital hike despite the applicable regulations, the insurer’s lawyer, Majed Al-Moazen, told Argaam in an exclusive on Wednesday.
The company planned to raise its capital to repay debts and enhance its financial position.
Weqaya will be able to fix financial irregularities through entering a partnership with a Kuwaiti strategic investor, who will inject cash in the company.
Almost a year ago, the company said it had filed to increase its capital to SAR 400 million-SAR 600 million, Al-Moazen said.
“The company now has the right to study its needs for capital increase, to compensate shareholders, which will be a win-win situation. When the ruling becomes endorsed, the outlook will be clearer,” he added.
On Mar. 29, 2017, Weqaya’s board of directors recommended a SAR 600 million rights issue, Argaam reported.
In April 2017, the insurer received a letter from SAMA requesting a detailed action plan, before deciding on its request to increase capital.
In May 2017, Weqaya’s shares were delisted from Tadawul.
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