TIDM61DH
RNS Number : 7972W
Kuwait Projects Co SPC Limited
19 April 2023
Immediate Release
KIPCO signs binding agreement to sell its stake in GIG to
Fairfax for KD 263.7 mn (US$ 860 mn)
"KIPCO acquires, scales and exits businesses when the time is
opportune" says company's Group CEO
Kuwait City, 19 April 2023: KIPCO - Kuwait Projects Company
(Holding) - announced that it has entered into a binding
implementation agreement to arrange for an off-market trade with
Fairfax Financial Holdings to sell KIPCO's 46.32% stake in Gulf
Insurance Group (GIG).
The price per share is KD 2 for a total of KD 263.7 million (US$
860 million) from which will be deducted KIPCO's share of cash
dividends that may be distributed by GIG for 2022. The deal is
contingent on the buyer obtaining the necessary regulatory
approvals and, depending on the timing of the execution of the
off-market trade, profit from the sale is expected to be in the
range of KD 70-80 million.
The announcement was made by KIPCO's Board Member and Group
Chief Executive Officer, Sheikha Dana Naser Sabah Al Ahmad Al
Sabah, during the company's Annual General Assembly Meeting. The
AGM witnessed the election of the Board of Directors for the next
three-year term.
Commenting on the agreement, Sheikha Dana said:
"As a holding investment company, KIPCO's strategy is to
acquire, scale and exit companies when the time is opportune. This
deal is the culmination of three decades of value creation and
growth. Our journey in the insurance business has been a journey of
success. Since becoming our partners in 2010, we have worked with
Fairfax to build a strong insurance provider that operates in 13
markets. We believe that the company will continue to grow under
Fairfax and will remain a leading player in the MENA insurance
market."
Following the AGM, KIPCO's Group CEO presented a review of the
company's activities in 2022 and its outlook for 2022 to an
audience of shareholders, financial analysts and institutional
investors.
2022.. The Year of Transformation
Sheikha Dana said that the year 2022 was, indeed, a year of
transformation for KIPCO. Following the successful completion of
the merger with Qurain Petrochemical Industries Company (QPIC),
KIPCO's portfolio is now more diversified, with new sectors
including energy, foodstuff, healthcare, manufacturing and
logistics. As a result of the merger, KIPCO's capital increased
91.2% to KD 508.8 million.
The strong performance of the core companies contributed to
strong results at the holding level. KIPCO's net profit for 2022
increased 44% to KD 25.2 million (US$ 82.3 million), with total
revenue from operations was up 47% to KD 1.06 billion (US$ 3.5
billion). Shareholder equity increased 81% to KD 590.5 million.
KIPCO's milestones, besides the merger, include issuing six-year
senior unsecured bonds worth KD 165 million, the largest
KD-denominated issue to date. Rating agencies viewed the merger as
credit positive. In line with global best practices, KIPCO issued
its first Sustainability Report during the past year.
Performance of Group companies
In 2022, KIPCO's core companies delivered positive performance.
Burgan Bank's net profit increased 15% to KD 52.1 million (US$ 170
million). Gross Written Premium for Gulf Insurance Group went up
52% to KD 831.7 million (US$ 2.72 billion).
As for SADAFCO, net profit for the nine month period ended
December 31, 2022 came to US$ 58.1 million (KD 17.8 million), an
increase of 50%. Meanwhile, United Real Estate posted a net profit
increase of 168% at KD 3.4 million (US$ 11.1 million). Revenue from
fees reported by Kamco Invest saw a 2.5% increase.
Jordan Kuwait Bank registered a 140% increase in net profit for
the year. NAPESCO's net profit increased 18% to KD 6.8 million (US$
22.2million), while KARO registered a 103% increase in net profit
to US$ 59 million (KD 18.1 million). As for ATC, net profit was up
32% at KD 7 million (US$ 22.8 million). United Education Company,
meanwhile, saw a 14% growth in profit.
Efficiency and Effectiveness
Commenting on the outlook for 2023, KIPCO's Group CEO said:
"The positive performance delivered by our core companies during
the year has contributed to our efforts to ensure that KIPCO is a
streamlined investment holding company that is both efficient and
effective. Moving into 2023, several measures have been taken to
minimize the impact of market volatilities and high interest rates,
and we are confident that we have put in place a strong base that
will allow us to move towards a more promising and sustainable
future."
- Ends -
Notes to Editors:
Kuwait Projects Company (Holding) - KIPCO - is a holding company
that focuses on investments in the Middle East and North Africa.
Its strategy of acquiring, building, scaling and selling companies
in the MENA region has worked successfully for over 30 years.
KIPCO's main business sectors are financial services, energy,
media, real estate , industry and education. KIPCO's financial
service interests include holdings in commercial banks, insurance
companies, asset management and investment banking.
The conversion rate used is US$1 to KD 0.30630
Further information:
Eman Al Awadhi Group Senior Vice President
Corporate Communications & Investor Relations
T: +965 2294 3416
M:+965 6033 6399
Eman.Alawadhi@kipco.com
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END
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