Takaful News - UAE: Takaful Emarat issues rights to raise capital by AED50 mln
Source: Middle East Insurance Review | Dec 2015
Takaful Emarat has launched a rights issue whereby the proceeds raised will increase the company’s capital by AED50 million (US$13.6 million), as part of the approval from shareholders to raise up to AED100 million.
The proceeds will be used to accelerate Takaful Emarat’s growth momentum and capitalise on the company’s recent restructuring under a new management team and its return to operating a profitable underwriting model. In particular, funds will be used to strengthen Takaful Emarat’s back office function, grow and develop its distribution channels and sales network across the UAE, and invest in digital and interactive client service technologies to ensure optimal customer service and efficient policy management.
Trading of the rights issue enables existing shareholders of the company who do not wish to subscribe to the new shares – which the company plans to issue as part of its capital increase – to sell all or part of their rights to other investors who do wish to subscribe.
The subscription for newly issued shares was open from 9 to 22 November.
Takaful Emarat’s CEO Wael Al-Sharif said: “We are pleased to be the first Sharia-compliant insurance company in the UAE to issue rights that can be publicly traded on an exchange. As a business, we have been completely restructured over the last 24 months and we are now well positioned to continue our growth trajectory as we focus on delivering maximum value for our shareholders and investors.”
Takaful Emarat saw net takaful income of AED27.3 million for the first nine months of the year increase by 110% y-o-y. Earned contributions jumped 229% to AED270.2 million.
Net operating income fell by 76% to AED1.3 million on an AED9.9 million drop in the investment income due to market volatility. The company is in the process of restructuring its investment portfolio to have stable investment income, it said in a statement.
AED1 = US$0.27