Logo of Gulf General Cooperative Insurance Co.
According to a statement to Tadawul, the reduction is part of the proposed transaction with BlueFive Investments Holding Ltd, aimed at restructuring the company’s capital and offsetting accumulated losses. 
The company added that the board subsequently recommended increasing the capital from SAR 124 million to SAR 300 million by issuing 17.6 million new ordinary shares at a nominal value of SAR 10 per share.
The capital hike will be carried out through issuing 12.6 million shares with the suspension of preemptive rights, which will be fully subscribed by BlueFive Insurance Arabia, a Saudi company under BlueFive Investments Holding Ltd, in addition to issuing 5 million shares through the conversion of debt provided by major shareholders.
The company said the capital increase with the suspension of preemptive rights will generate total proceeds of SAR 126 million, while the debt conversion will settle the SAR 50 million major shareholders’ loan.
The proposed transaction is subject to obtaining the Insurance Authority’s non-objection, as well as the approval of the Capital Market Authority (CMA), Saudi Tadawul, and the General Authority for Competition, in addition to the approval of the extraordinary general meeting (EGM).
Details of Proposed Capital Changes
Item
Details
Capital before reduction
SAR 300 mln
Capital after reduction
SAR 124 mln
Reduction percentage
58.67%
Number of shares before reduction
30 mln shares
Number of shares after reduction
12.4 mln shares
Number of cancelled shares
17.6 mln shares
Reduction method
Cancellation of 0.5867 share for each existing share
Reason for reduction
offsetting part of accumulated losses and restructuring the capital
Capital after increase
SAR 300 mln
Number of new shares
17.6 mln shares
BlueFive shares
12.6 mln shares
The company noted that, with regard to the debt conversion, both Saudi General Investment Services and Trading Co. and Marketing and Commercial Agencies Co. Ltd are related parties to the transaction, as they are major shareholders in the company. The major shareholders’ loan will be converted into shares in their favor.
It added that there are conflicts of interest involving three board members: Saud Alsulaiman, due to his ownership of a stake in BlueFive Investments Holding and Saudi General Investment Services and Trading Co.; Jamal Al-Dabbagh, due to his ownership of a stake in Marketing and Commercial Agencies Co. Ltd; and Mohamed Hosnee Jazeel, as he holds an executive position at Al-Dabbagh Group, which owns the capital of Marketing and Commercial Agencies Co. Ltd.
The board members of interest abstained from voting on the board’s resolution.
Logo of Gulf General Cooperative Insurance Co.
According to a statement to Tadawul, the reduction is part of the proposed transaction with BlueFive Investments Holding Ltd, aimed at restructuring the company’s capital and offsetting accumulated losses.
The company added that the board subsequently recommended increasing the capital from SAR 124 million to SAR 300 million by issuing 17.6 million new ordinary shares at a nominal value of SAR 10 per share.
The capital hike will be carried out through issuing 12.6 million shares with the suspension of preemptive rights, which will be fully subscribed by BlueFive Insurance Arabia, a Saudi company under BlueFive Investments Holding Ltd, in addition to issuing 5 million shares through the conversion of debt provided by major shareholders.
The company said the capital increase with the suspension of preemptive rights will generate total proceeds of SAR 126 million, while the debt conversion will settle the SAR 50 million major shareholders’ loan.
The proposed transaction is subject to obtaining the Insurance Authority’s non-objection, as well as the approval of the Capital Market Authority (CMA), Saudi Tadawul, and the General Authority for Competition, in addition to the approval of the extraordinary general meeting (EGM).
Details of Proposed Capital Changes
Item
Details
Capital before reduction
SAR 300 mln
Capital after reduction
SAR 124 mln
Reduction percentage
58.67%
Number of shares before reduction
30 mln shares
Number of shares after reduction
12.4 mln shares
Number of cancelled shares
17.6 mln shares
Reduction method
Cancellation of 0.5867 share for each existing share
Reason for reduction
offsetting part of accumulated losses and restructuring the capital
Capital after increase
SAR 300 mln
Number of new shares
17.6 mln shares
BlueFive shares
12.6 mln shares
The company noted that, with regard to the debt conversion, both Saudi General Investment Services and Trading Co. and Marketing and Commercial Agencies Co. Ltd are related parties to the transaction, as they are major shareholders in the company. The major shareholders’ loan will be converted into shares in their favor.
It added that there are conflicts of interest involving three board members: Saud Alsulaiman, due to his ownership of a stake in BlueFive Investments Holding and Saudi General Investment Services and Trading Co.; Jamal Al-Dabbagh, due to his ownership of a stake in Marketing and Commercial Agencies Co. Ltd; and Mohamed Hosnee Jazeel, as he holds an executive position at Al-Dabbagh Group, which owns the capital of Marketing and Commercial Agencies Co. Ltd.
The board members of interest abstained from voting on the board’s resolution.
