The entire business of Solidarity General Takaful (SGT) is proposed to be transferred to Al Ahlia Insurance Company, which is also seeking a conversion of its licence from conventional insurance to takaful.
Notices published by the Central Bank of Bahrain (CBB) in the local media yesterday said the regulator had received separate applications from SGT and Al Ahlia.SGT has applied to transfer its business to Al Ahlia and be dissolved under article 66 of CBB Law.Objections to the decision will be received by the CBB for the next three months starting yesterday, said one of two notices.
According to the other notice, Al Ahlia has applied to convert its licence to undertake Islamic insurance (takaful) under article 48 of Central Bank of Bahrain and Financial Institutions Law No 64.Persons opposed to the decision also have to submit their objections to CBB within three months starting yesterday.SGT, a subsidiary of Solidarity Group Holding, is aiming to consolidate its position as one of the top insurance players in the country through the merger.
A statement earlier this month said shareholders of the two companies had already approved the merger terms and the consolidation is expected in December this year.The combined entity, which would be named Solidarity Bahrain, will have a paid-up capital of BD11.2 million and an estimated 15 per cent market share with 10 branches, making it the largest takaful company in the country.
SGT shareholders will be entitled to receive 2.5 shares of Al Ahlia stock for each share held, on the basis of the independent valuations as required by the CBB.
In order to facilitate the merger, Al Ahlia shareholders approved the conversion of the insurance licence from conventional to takaful.They also approved the increase of the authorised share capital of Al Ahlia to BD12m.
Last year, Solidarity acquired a majority stake in Bahrain Bourse (BHB)-listed Al Ahlia Insurance Company via an open offer in a deal worth BD10.7m. Officials had said then that Al Ahlia would continue to be listed on BHB.
The latest statement quoted Solidarity Group Holding chief executive Ashraf Bseisu as saying that since the stake acquisition, the management was “very pleased with the commonality of the cultures, operating models and the customer service focus of our two subsidiaries”.“We believe that consolidation has become a necessity to create larger and stronger financial institutions capable of offering a unique customer experience”. “Solidarity Bahrain, the new merged entity, will result ultimately in being the largest takaful company and one of the leading top-tier insurance players in Bahrain,” Mr Bseisu said.“As part of the growth strategy, Solidarity Group actively pursues promising expansion opportunities in the insurance industry.
This merger translates those expansion goals into a tangible reality.Following completion of the merger, Solidarity Bahrain will be headed by Jawad Mohamed, who said, “Al Ahlia is the ideal partner for Solidarity General Takaful. This is the first insurance industry merger Bahrain has seen in 20 years.“We expect the merger to significantly intensify and strengthen our combined ability to serve our retail customers and corporate clients that made both Solidarity General Takaful and Al Ahlia successful.—zawya