Takaful Emarat is inviting shareholders to subscribe to its rights issue, which will increase the company’s capital by AED50 million (AED13.6 million) initially. Takaful Emarat’s shareholders approved a capital raise of up to AED100 million at its Extraordinary General Assembly Meeting last December.
Existing shareholders of the Dubai-listed, Shariah-compliant life and health takaful provider are entitled to subscribe to one new share for every two shares held, at a price of AED1 each. The rights issue will be held between 1 November and 15 November, while subscription for the newly issued shares will be between 9 November and 22 November. As required by law, Takaful Emarat has published the schedule for the subscription process and informed its shareholders through the newspapers on how to exercise their rights to subscribe for shares or trade the rights.
This is the first time a Shariah-compliant insurance company in the UAE has issued rights that may be publicly traded on an exchange.
The proceeds will be used to capitalise on the company’s recent restructuring under a new management team and its return to operating a profitable underwriting model. The new capital will be used to strengthen Takaful Emarat’s back office function, grow and develop its distribution channels and sales network across the UAE, particularly in the Northern Emirates, and invest in the company’s digital technologies to ensure optimal customer service and efficient policy management. The funds will also be used to streamline the company’s investments, ensuring a more stable and predictable income and return on investment.
Over the last two years, Takaful Emarat, under a new management team which includes 12 senior executives recruited from globally respected insurance businesses, has been re-organised and streamlined and is now focused on growth in its domestic market. For the first half of 2015, the company reported a 187% increase in sales to AED164 million, with underwriting profit up 82% to AED17.3 million. During the same period, net written premiums increased 271% to AED141 million.
Takaful Emarat recently announced a major distribution agreement with Wahat Al Zaweya Company for Investment and Real Estate Development to act as the exclusive takaful provider to cover thousands of Wahet Al Zaweya home mortgage clients in case of death and disability. This complements Takaful Emarat’s existing partnership and distribution agreements with major financial institutions such as RAK Bank and Emirates Islamic Bank, with further partnerships expected.
Mr Wael Al-Sharif, CEO of Takaful Emarat said: “As a business, we have been completely restructured over the last 24 months with a new management team on board with extensive insurance experience who are tasked with growing the business. We have delivered significant progress to date from both a financial and customer acquisition perspective as we expand both our distribution channels and physical presence across the UAE.
“As we continue to invest in our business, we are now well positioned to continue our growth trajectory as we focus on delivering maximum value for our shareholders and investors.”
AED1=US$0.27