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Qatar’s Doha Insurance Plans $120m Rights Issue

Qatar’s Doha Insurance Plans $120m Rights Issue

The insurer has received regulatory approval for the issuance of 24,260,000 new shares.

Qatar’s Doha Insurance said on Monday it would seek shareholder approval next month for a capital increase worth QAR436.7 million ($119.9 million), with the cash aimed at strengthening its ability to work at home and abroad.

The insurer has received regulatory approval for the issuance of 24,260,000 new shares to shareholders through a rights issue, it said in a bourse filing. The move will nearly double its capital.

New shares will be priced at QAR18 each, a 30 per cent discount to its QAR25.70 closing share price on Monday. Rights issues in Qatar and across the Gulf region are usually offered at steep discounts.

The rights issue would increase financial solvency and further improve its credit rating, which would allow it to compete for mega projects both locally and internationally, the statement said.

Qatar is in the midst of a construction boom, with the tiny, gas-rich country planning to spend as much as $140 billion on infrastructure projects, including a new airport, stadiums, roads and railways, as it prepares to host the soccer World Cup in 2022.

Shareholders’ approval is still required, with a vote on the rights issue expected to be held on February 17.

The insurer has no state ownership, according to Zawya, a Thomson Reuters unit. This is in contrast to most other insurance and financial services firms listed in the Gulf Arab country, who are partially owned by sovereign investment funds.

Last February, shareholders of Qatar Insurance approved a QAR963.2 million rights issue as well as a 20 per cent stake sale to Qatar Holding, a unit of sovereign wealth fund Qatar Investment Authority.

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