Saudi Re to raise $71m via subscription agreement with PIF

Saudi Arabia-domiciled reinsurer, Saudi Reinsurance Co. has announced plans to increase its capital by SR267.3 million (approximately USD 71 million) through a strategic subscription with the Public Investment Fund (PIF), a sovereign wealth fund, according to a filing with the stock exchange.

In October 2023, the agreement was initially outlined in a non-binding memorandum of understanding, and extended on December 25, 2023, for an additional six months.

The binding subscription agreement will see Saudi’s first reinsurance company raise its capital from SR891 million to SR1.15 billion, as the company looks to enhance its financial position.

The filing reveals that the increase will be achieved through issuing 26.73 million new ordinary shares, representing 30% of the company’s current capital, valued at SR10 each according to a recent filing.

Further, in full consideration of the issuance of the new shares, PIF has agreed to pay Saudi Re a subscription amount of SAR16 per share, leading to a total subscription amount of SAR427.68 million.

This transaction will give PIF a 23.08% ownership stake in the company following the capital increase, subject to the non-objection of the Insurance Authority and the approval of the Capital Market Authority, and Tadawul; along with the approval of the Saudi Re’s general assembly and internal approvals required at PIF.