Al Wathba will raise its share capital fourfold

Wednesday, Dec 28, 2005

By Stanley Carvalho, Staff Reporter

Abu Dhabi: The Al Wathba Insurance Company is increasing its share capital fourfold to Dh240 million to prepare for growing business opportunities in the UAE, a senior company official said.

A general assembly meeting recently ratified the proposal to raise the capital.

"The general assembly has agreed that the company raise its share capital from Dh60 million to Dh240 million and the board of directors has been authorised to put in place the procedures," said Rashid Darwish Al Kitbi, Managing Director, Al Wathba Insurance.

"The capital will be raised in two stages and the articles of association will be amended accordingly," he told Gulf News.

In the first stage, the capital will be raised by Dh60 million and in the second stage it would be increased by Dh120 million.

"By the end of January 2006 the additional Dh60 million will be raised and the balance will be raised by January 2007."

Al Kitbi said the capital will be raised through a private issue to the present shareholders that include UAE nationals and companies.

The decision to raise the capital comes in the wake of huge business opportunities projected in the local market.

"We see tremendous business opportunities as the UAE economy grows at a robust pace and the company has to be ready for that growth.

"The company also needs capital to undertake some projects in the UAE's construction and energy sector.

"We are building two towers in Dubai and we see opportunities in the energy sector," he said.

Al Wathba Insurance expects net profit to grow substantially in 2005, he added without providing figures.

However, the company earned a net profit of Dh31 million during first nine months of this year.

The company has branches in Abu Dhabi, Dubai, Al Ain and Sharjah.

An insurance industry executive said local insurance companies are gearing up to cope with growing competition in the coming years.

"Most local insurance companies have managed with the minimum capital requirements.

But with the opening up of the insurance industry and foreign companies coming in, local companies need to be strongly capitalised.

"You will see more national insurance companies raising their capital soon."

Gulf News 2005. All rights reserved.