As reported early last week, there had been industry rumours a deal was on the table, however details had not yet emerged.
Late last week, Green Crescent released a statement to the Abu Dhabi stock exchange, where it is listed, confirming Axa and the Kanoo Group would be the primary investors in a capital increase of AED100m via a convertible bond instrument.
Upon conversion, the proposed deal would take Green Crescent’s paid up capital to AED200m and, said the firm, allow it to “continue to grow its health insurance business and to optimize its product offering in the life insurance segment”.
The company also announced an extraordinary shareholders meeting will take place on 26 March at which shareholders have been asked to vote on the proposal.
Commenting on the proposal, Green Crescent chairman Sheikh Bin Hamdan Al Nahyan said: “The linkage of GCIC’s extensive local market knowledge and technical experience with AXA’s deep industry expertise and capabilities represents a unique opportunity for GCIC to expand our product offering and market share.
“The proposed deal is expected to provide significant value creation for shareholders, enabling GCIC to further penetrate the UAE health segment while leveraging our life license to provide further growth in premiums and margins.”
Meanwhile, Green Crescent managing director and interim chief executive, Nathan Kennedy added the deal “represents a tremendous opportunity for GCIC shareholders” and highlighted that “the expansion of our capital base would provide GCIC with the opportunity to further invest in building scale and profitability in both the health and life segments”.
“If shareholders and regulators approve, and if negotiations are successfully concluded with the investor group, GCIC should realize considerable growth in gross written premiums, further gains in cost efficiency, and improved profitability in 2014 and future years,” he said.
Green Crescent was founded in 2008 as a public joint stock company. It currently operates in the UAE, providing health and life insurance products to groups and individuals.
