United Cooperative Assurance Group (ACIG), a company listed on the Saudi Stock Exchange, announced a significant strategic step: the signing of a binding subscription agreement with Diyar Arabia Investment Company. This agreement aims to increase ACIG's capital from SAR 291 million to SAR 300 million through a private placement of new shares, with existing shareholders having their pre-emptive rights waived.
According to the company's official disclosure on the Saudi Stock Exchange (Tadawul), the capital increase will be achieved through the issuance of 900,000 new ordinary shares with a par value of SAR 10 per share. Under the agreement, Diyar Arabia will fully subscribe to these shares, representing a direct investment of SAR 9 million. Following the completion of the transaction, Diyar Arabia's ownership in Aseeg's capital will reach 3%, a move reflecting confidence in the insurance company's future performance.
General context and importance of the deal
This step comes at a pivotal time for the Saudi insurance sector, a key pillar of the Financial Sector Development Program under the Kingdom's Vision 2030. The sector is undergoing a comprehensive restructuring aimed at enhancing its efficiency and improving the financial solvency of its companies. Capital increases are a common tool used by insurance companies to comply with new regulatory requirements, finance expansion plans, and strengthen their capacity to manage risks and absorb growth in written premiums.
Expected impact on the company and the market
This increase is expected to have a direct positive impact on Aseeg, strengthening its financial position and bolstering its solvency margin, a key indicator of the company's ability to meet its obligations to policyholders. This strategic alliance with Diyar Arabia, a leading real estate investment company, also opens new avenues for collaboration, particularly in insurance related to the real estate and construction sectors. More broadly, this transaction reflects the attractiveness of the Saudi insurance sector to strategic investors and underscores the positive dynamism of the local economy.
Regulatory requirements and next steps
The completion of the transaction remains contingent upon fulfilling several key conditions and obtaining the necessary regulatory approvals. These include obtaining a no-objection certificate from the Insurance Authority, approval from the Capital Market Authority, and approval from the Saudi Stock Exchange (Tadawul) and the Extraordinary General Assembly of Aseeg. Aseeg has appointed Investment Securities Brokerage Company (Investment Capital) as its financial advisor to manage this process, ensuring that all procedures are conducted in accordance with applicable regulations. Once all approvals are obtained, the company will proceed with the necessary regulatory procedures with the relevant authorities to list the new shares and enable their trading on the market as soon as possible.
