KIPCO signs agreement to sell stake in Gulf Insurance

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Purchase price set at two dinars per share

KUWAIT CITY, April 24: Kuwait Projects Company (Holding) announced that it entered into a binding agreement to arrange a special deal agreed upon with Fairfax Financial Holdings Company to sell KIPCO’s full stake in Gulf Insurance Group, which amounts to 46.32 percent, reports Al-Qabas daily. The company said that the purchase price was set at two dinars per share, with a total of 263.7 million dinars ($860 million), from which the share of the projects company will be deducted, which may be distributed by Gulf Insurance from cash dividends for the year 2022.

The conclusion of the deal depends on the buyer obtaining the necessary regulatory approvals. And the expected profit from the deal will range between 70 and 80 million dinars, depending on the time of implementation of the agreed deal. This announcement was made by a member of the Board of Directors and CEO of the Group, Sheikha Adana Nasser Sabah Al-Ahmad Al-Sabah, during the annual meeting of the company’s general assembly. The meeting witnessed the election of the members of the Board of Directors for a new term that extends for the next three years. Commenting on this agreement, Sheikha Adana said, “The KIPCO strategy, as an investment holding company, is represented in acquiring and developing companies, and then exiting from them at the appropriate time. This deal represents the outcome of three decades of enhancing the value of Gulf Insurance. We have achieved high growth rates in Insurance sector and our experience was successful.

Since Fairfax became our partner in 2010, together we have built a strong insurance group operating in 13 markets. We believe that Gulf Insurance will continue to grow under Fairfax management and remain a leading player in the insurance market in the Middle East and North Africa region.” The meeting of the company’s general assembly was followed by a presentation by the CEO of the group of the company’s most prominent achievements during the past year and expectations for 2023, to attendees of the shareholders, financial analysts and institutional investors.

Sheikha Adana said that the year 2022 marked a turning point for KIPCO. Following the successful completion of the merger deal with Qurain Petrochemical Industries Company, KIPCO’s portfolio has become more diversified with new sectors including energy, food, healthcare and logistics. The merger deal also led to an increase in the capital of projects by 91.2 percent, to reach 508.8 million dinars.

The exceptional performance of the group’s main companies contributed to the company achieving strong results over the past year. Net profits for KIPCO grew by 44 percent to reach KD 25.2 million ($82.3 million), while total revenues from operations increased by 47 percent to reach KD 1.06 billion ($3.5 billion). Shareholders’ equity increased by 81 percent to 590.5. Among the company’s most prominent achievements, in addition to completing the merger deal, was the issuance of an initial unsecured bond of 165 million dinars ($539 million) for six years, which is the largest issuance of bonds denominated in dinars. On the other hand, the credit rating agencies considered that the merger deal had a positive impact on the company’s credit position. In line with international best practices, the projects issued their first sustainability report last year.

The companies of the Main Projects Company Group achieved a positive performance during the past year. In this regard, the net profits of Burgan Bank recorded a growth of 15% to reach 52.1 million dinars (170 million dollars), while the total volume of written premiums for the Gulf Insurance Group increased by 52 percent to reach 831.7 million dinars ($2.72 billion). SADAFCO achieved a net profit of $58.1 million (17.8 million dinars) for the first nine months of its fiscal year (the period ending on December 31, 2022), an increase of 50 percent.

As for the United Real Estate Company, its profits increased by 168 percent to reach 3.4 million dinars ($11.1 million). In turn, revenue from fees for Kamco Invest increased by 2.5 percent. Profits of Jordan Kuwait Bank grew by 140 percent. The net profit of Nabisco increased by 18 percent to reach 6.8 million dinars (22.2 million dollars), while the Kuwait Aromatics Company recorded a 103 percent increase in net profits to reach 59 million dollars (18.1 million dinars) and as for the Technological Advancement Company, it achieved profits of 7 million dinars (22.8 million dollars), an increase of 32 percent. The profits of the United Education Company also recorded a growth of 14 percent.

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