Salama's Capital Restructuring: A New Chapter
Islamic Arab Insurance Company (Salama) embarks on a strategic capital restructuring to enhance solvency and regulatory compliance.
Summary
Salama's shareholders have approved a capital restructuring plan to offset losses and issue Mandatory Convertible Sukuk, reinforcing its financial position.
The Islamic Arab Insurance Company, popularly known as Salama, has taken a significant step toward reinforcing its financial foundation. On October 16, 2025, during a pivotal General Assembly, shareholders approved a strategic capital restructuring plan aimed at offsetting accumulated losses and enhancing the company's solvency.
This move involves a capital reduction to cancel treasury shares, followed by the issuance of up to AED 175 million in Mandatory Convertible Sukuk (MCS) to select strategic investors. These Sukuk will be converted into new shares, pending final regulatory approval. This initiative underscores Salama's commitment to meeting the Central Bank of the UAE's regulatory requirements and fortifying its financial standing.
Mohamed Ali Bouabane, Salama's Group CEO, expressed confidence in this strategic direction, emphasizing the importance of maintaining strong underwriting discipline and optimizing the company's expense base. This restructuring not only aligns with regulatory demands but also positions Salama for sustainable growth across its diverse product lines and geographical presence.
The company's financial health has shown improvement in the first half of 2025, with total equity rising by 5.2% to AED 351.84 million and a net profit of AED 8.25 million. S&P Global Ratings has affirmed Salama's long-term issuer credit and insurer financial strength rating at 'BBB-' with a Developing outlook, reflecting the company's improving fundamentals.
Given the strategic steps taken by Salama and the confidence shown by strategic investors, the outlook for the company appears optimistic. Investors might consider holding their positions as Salama strengthens its balance sheet and regulatory compliance, paving the way for future growth.
Source
Summary
Salama, a leading Takaful provider in the UAE, announced that its shareholders have approved a capital restructuring plan aimed at strengthening its solvency and regulatory capital position. During a General Assembly on October 16, 2025, shareholders agreed to a capital reduction to offset losses and cancel treasury shares. Following regulatory approval, Salama plans to issue up to AED 175 million in Mandatory Convertible Sukuk to select strategic investors through a special purpose vehicle. This move is intended to reinforce Salama’s financial position in compliance with the Central Bank of the UAE's requirements. The plan reflects strong market confidence in Salama's fundamentals and long-term stability. Salama reported a 5.2% increase in total equity and a net profit of AED 8.25 million in the first half of 2025. S&P Global Ratings affirmed Salama's long-term issuer credit and insurer financial strength rating at ‘BBB-’ with a Developing outlook, citing improving fundamentals and capital position.
