A 200 million dirham ($54.5 million) initial public offering of the UAE's Islamic Arab Insurance Company (IAIC) closed about eight times oversubscribed, the company's investment bank said on Sunday. Khaled Sifri, managing director of investment banking at Shuaa Capital, said IAIC had raised a total of 950 million dirhams to increase the company's capital to 1 billion dirhams.
While 200 million dirhams came through the IPO, which closed on Thursday, founding shareholders contributed 750 million dirhams through a rights issue. "This part of the world is underinsured. Islamic insurance can play an interesting part in changing that," said Sifri.
IAIC is an established Islamic insurance and reinsurance company, based in Dubai, a trading hub in the energy-rich United Arab Emirates. Islamic insurance is also known as Takaful.
The capital raised will finance IAIC's 350 million dirham acquisition of an 82 percent stake in Bahrain-based Islamic insurance and investment firm TARIIC, which has operations in the Middle East and Asia.
Sifri said IAIC would also use the capital to finance internally-generated expansion and a proposed joint venture in Saudi Arabia.
IAIC plans to list its shares on the Dubai stock exchange. At present, only UAE nationals can own shares in the country's insurance companies, but banking sources said the government was looking to allow some foreign ownership.
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