Qatar Insurance shareholders back rights issue

Shareholders of Qatar Insurance have approved plans for a rights issue worth QAR963.2m (US$264.6m) and to sell a 20-percent stake to sovereign wealth fund Qatar Holding, the insurer said on Monday.

The company will sell 21.4m new shares to existing shareholders priced at QAR45 each, a bourse filing said.

Like most rights issues in the Gulf Arab state, the proposed price is a significant discount to the market price. Qatar Insurance shares closed on Sunday at QAR71.6.

The planned capital increase, which still needs regulatory approval, is open to those holding shares on February 14 and will happen once a bonus share issue has been completed.

The bonus share offering, giving shareholders one new share for every five they currently hold, was also approved at the shareholder meeting on Sunday.

Shareholders also backed the planned sale of new shares worth 488.6 million riyals to Qatar Holding, a move approved by the insurer's board in October.

Qatar Holding's presence as a strategic partner would strengthen the financial position of the company and help it to compete against major insurance companies elsewhere, the company said at the time.

The Qatari government is already Qatar Insurance's largest shareholder with a 12-percent stake, according to Thomson Reuters data.