DUBAI, Jan 6 (Reuters) - Qatar’s Doha Insurance said on Monday it would seek shareholder approval next month for a capital increase worth 436.7 million riyals ($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 18 riyals each, a 30 percent discount to its 25.70 riyals 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 963.2 million riyals rights issue as well as a 20 percent stake sale to Qatar Holding, a unit of sovereign wealth fund Qatar Investment Authority. ($1 = 3.6415 Qatar riyals) (Reporting by David French; Editing by Olzhas Auyezov)