Saudi Arabia’s Mediterranean and Gulf Cooperative Insurance and Reinsurance Company (Medgulf) is set to increase its capital to more than 1 billion riyals ($266million) via a rights issue worth about 420 million riyals to support its expansion strategy. 

The move has been approved during the recent extraordinary general assembly and will include the issuance of 35 million ordinary shares, equivalent to 50 percent of the current shares, Medgulf told the Saudi Stock Exchange (Tadawul) on Thursday. With the offering, the company will increase its capital from 700 million riyals to a total of 1,050,000,000 riyals and expand its shares to 105 million. 

“The reason for the increase [in] the capital [is] to support the expansion of the company’s business activities and enhance the margin of solvency,” the disclosure said. 

The Saudi insurer, a major player in the industry, intends to offer the shares at 12 riyals and a nominal value of ten riyals per share, with the total offering amount of 420 million riyals. 

The Saudi Capital Market Authority (CMA) had earlier approved the capital hike plan. The company has appointed SNB Capital as financial advisor, lead manager and underwriter for the offering. 

(Writing by Cleofe Maceda; editing by Daniel Luiz ) 

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