Saudi Enaya Plans Capital Cut, Rights Issue to Fix Losses

For existing shareholders, the capital reduction shrinks the number of shares they hold. The rights issue offers a chance to buy new shares at a discount. The subscription price will determine the effective cost of participation and the degree of dilution for non-participating holders.

The restructuring is a familiar tool in the Saudi insurance sector. Several companies have used capital reductions followed by rights issues to restore viability. Shareholders must approve the plan at the EGM, and the regulatory nod from SAMA is also required.

Enaya trades on the Saudi Stock Exchange under ticker 8310. A successful restructuring would leave the insurer with a cleaner balance sheet and reduced share count, making it easier to attract new capital or pursue underwriting growth. The rights issue, if fully subscribed, would provide fresh funds to support operations and meet solvency requirements.

The stock has been under pressure as investors weighed the likelihood of a dilutive restructuring. The dual-step approach – cut first, then raise – is designed to avoid a scenario where the rights issue alone would not fully eliminate the accumulated losses. By reducing capital first, the company ensures the accumulated losses are fully absorbed before new equity is issued.