BlueFive Capital, a global investment platform, has signed a binding share subscription agreement with Gulf General Cooperative Insurance Company (GGI), a publicly listed company on Saudi Arabia’s Stock Exchange.
The strategic move aims to restructure GGI’s share capital to strengthen its financial position by first removing SAR 176 million share capital, taking it from SAR 300 million to SAR 124 million, by cancelling 17.6 million shares, which will eliminate a large portion of the insurer’s accumulated losses.
After this, GGI will increase its share capital back to SAR 300 million by issuing 17.6 million new shares, of which 12.6 million new shares (42% of GGI after the restructuring) will be issued to BlueFive or an entity it controls.
The other 5 million new shares will be issued to the substantial shareholders of GGI, to capitalise a SAR 50 million loan they had previously provided to the Company.
The completion remains subject to obtaining the necessary regulatory and shareholder approvals and the satisfaction of conditions set out in the Share Subscription Agreement.
BlueFive Capital aims to make GGI the “first global insurance leader emerging from the Middle East.” The strategy is centred on consolidating under-scaled insurance and reinsurance operators alongside ecosystem players, while capturing high-growth greenfield opportunities.
The platform aims to deliver long-term value creation by enhancing technical capabilities, digital and operational transformation, and developing strategic and operational synergies across the platform, supported by a disciplined approach to M&A execution and capital deployment.
Leveraging the group’s asset management expertise, the platform will pursue a targeted buy-and-build strategy, initially focused on the GCC before expanding into other high-growth markets, prioritising Shariah-compliant players, explained BlueFive Capital.
Hazem Ben-Gacem, Founder and Chief Executive, BlueFive Capital, commented, “We are pleased to propose this investment in GGI, which is designed to reset the Company’s financial position and provide a clear path for sustainable growth.
“GGI is the first step in our vision to build the first global leader in insurance out of the Middle East. We see a compelling opportunity in the Saudi insurance market, and we look forward to partnering with GGI to enhance its market position and create significant long-term value for shareholders and policyholders alike.”
Mazen Hani Zaki Altamimi, Chairman, Gulf General Cooperative Insurance Co., said, “This agreement marks a pivotal moment for GGI. The Board believes this restructuring, supported by BlueFive’s strategic investment, provides the best path forward to strengthen our financial position and serve our policyholders.
“We are confident that this partnership will unlock new opportunities and drive sustainable growth for the Company and all our stakeholders. We would also like to extend our sincere appreciation to the Insurance Authority and the Capital Markets Authority for their continued guidance and support throughout this process, and look forward to their ongoing collaboration as we progress this partnership.”
BlueFive Capital is being advised by SNB Capital and A&O Shearman, while GIB Capital and AS&H Clifford Chance are acting for GGI.
