PIF Backs Saudi Re's $71 Million Capital Raise for Strategic Growth

Saudi Reinsurance Co. (Saudi Re) is set to enhance its financial position by increasing its capital by SR267.3 million ($71 million) through a strategic subscription agreement with the Public Investment Fund (PIF).

The binding agreement, signed on July 4, will see Saudi Re, the Kingdom's first reinsurance company, raise its capital from SR891 million to SR1.15 billion. This increase will be achieved by issuing 26.73 million new ordinary shares, each priced at SR10, according to a recent bourse filing.

The new shares, representing 30 percent of the company's current capital, will be fully subscribed by PIF at SR16 per share, totaling SR427.68 million. As a result, PIF will acquire a 23.08 percent ownership stake in Saudi Re following the capital increase.

This transaction follows an initial non-binding memorandum of understanding signed on Oct. 8, 2023, which was extended on Dec. 25, 2023, for an additional six months, highlighting the expanding business environment in Saudi Arabia.

The capital increase, backed by PIF's subscription, aims to strengthen Saudi Re’s financial stability and competitive edge. It aligns with Saudi Arabia’s Vision 2030 goals, which focus on fostering a robust investment climate, economic diversification, and enhancing the Kingdom’s insurance sector.

Source: Arab News