Kuwait Projects Holding Company (KIPCO) has announced that it has entered into a binding agreement to arrange a special deal agreed upon with Fairfax Financial Holdings to sell its full stake in Gulf Insurance Group, which amounts to 46.32 percent.
The purchase price of the share was set at 2 dinars per share, with a total of 263.7 million dinars ($860 million), from which the share of “KIPCO” is deducted from what may be distributed by “Gulf Insurance” in cash profits for 2022. The conclusion of the deal depends on the buyer obtaining the necessary regulatory approvals The expected profit from the deal ranges between 70 to 80 million dinars, depending on the time of execution of the agreed deal.
This announcement was made by a member of the Board of Directors and CEO of the Group, Sheikha Adana Nasser Sabah Al-Ahmad Al-Sabah, during the annual meeting of the company’s general assembly which witnessed the election of the members of the Board of Directors for a new term that extends for the next 3 years.
Commenting on the agreement, Sheikha Nasser said: “The KIPCO’s strategy as an investment holding company is to acquire and develop companies and then exit from them at the appropriate time. This deal is the result of 3 decades of enhancing the value of Gulf Insurance. We have achieved high growth rates in the insurance sector and our experience was successful.”
She added, “Since Fairfax became our partner in 2010, we have worked together to build a strong insurance group operating in 13 markets, and we believe that Gulf Insurance will continue to grow under the management of Fairfax and will remain a leading player in the insurance market in the Middle East and North Africa.”
After the meeting of the company’s general assembly, the CEO of the group gave the audience of shareholders, financial analysts and institutional investors a presentation of the company’s most prominent achievements during the past year and expectations for 2023.
Sheikha Nasser said that 2022 marked a turning point for KIPCO, and after the successful completion of the merger deal with Qurain Petrochemical Industries Company, KIPCO’s portfolio became more diversified with new sectors including energy, food, health care and logistics. This led to an increase in the capital of “KIPCO” by 91.2 percent, to reach 508.8 million dinars.
She pointed out that the exceptional performance achieved by the group’s main companies contributed to the company’s achieving strong results during the past year, as KIPCO’s net profits grew by 44 percent to reach 25.2 million dinars ($82.3 million), while the total revenues from operations were achieved an increase of 47 percent to reach 1.06 billion dinars ($3.5 billion). Shareholders’ equity rose 81 percent to reach 590.5 million.
Among KIPCO’s most prominent achievements, in addition to completing the merger deal, is the issuance of 165 million dinars ($539 million) of primary unsecured bonds for a period of 6 years, which is the largest issuance of bonds denominated in dinars. On the other hand, the credit rating agencies considered that the merger deal had a positive impact on the company’s credit position. In line with international best practices, the projects issued their first sustainability report last year.
The main companies of the KIPCO Group achieved a positive performance during the past year. In this regard, the net profits of Burgan Bank grew by 15 percent to reach 52.1 million dinars ($170 million), while the total volume of written premiums for the Gulf Insurance Group increased by 52 percent to reach 831.7 million dinars ($2.72 billion).
For its part, “Sadafco” achieved net profits of $58.1 million (17.8 million dinars) for the first nine months of its fiscal year (period ending on December 31, 2022), an increase of 50 percent. As for the United Real Estate Company, it recorded a growth in its profits by 168 percent to reach To 3.4 million dinars ($11.1 million), revenues from fees for Kamco Invest increased by 2.5 percent.
The profits of the Jordan Kuwait Bank recorded a growth of 140 percent, and the net profits of Nabisco increased by 18 percent to reach 6.8 million dinars (22.2 million dollars), while the Kuwaiti Aromatics Company recorded a 103 percent increase in its net profits to reach 59 million dollars (18.1 million dollars). Million dinars). As for the Technological Advancement Company, it achieved profits of 7 million dinars (22.8 million dollars), an increase of 32 percent. The profits of the United Education Company recorded a growth of 14 percent.
Commenting on the future aspirations for 2023, the CEO of the group said, “The positive performance achieved by the main (KIPCO) companies last year supported our efforts aimed at making (the projects) an efficient and effective investment holding company.”
She added, “As we move to 2023, we have taken several protective measures against market volatility and high interest rates, and we are confident that we have laid a strong foundation that allows us to move towards a more promising and sustainable future.”