JEDDAH, 19 February 2005 — BMG and Saudi Investment Bank (SAIB) have recently signed a memorandum of understanding to act jointly as lead managers and financial advisers for the process of share flotation of new insurance companies, pending licensing by the Saudi Arabian Monetary Agency (SAMA).
According to Basil Al-Ghalayini, BMG’s chief executive officer, “our consortium will take responsibility for the full IPO process completely. This will include hiring other advisers including legal advisers and auditors”. Our joint resources give us immense experience in the Saudi insurance sector, as also our knowledge of the new IPO rules issued by the Capital Market Authority (CMA). The consortium will handle all the required logistics especially dealing with other banks and with the regulators on the subscription procedures of these IPOs. Also, the consortium will handle all the documentation aspects of the IPOs while also cooperating on their marketing aspects. Furthermore, the consortium will source out all the legal and auditing requirements and supervise them to insure the best outcome according to SAMA and CMA regulations.
On the size of these IPOs (between SR25 million to SR100 million), where it will be swallowed by the market in hours, the consortium is taking an initiative to propose different structures to SAMA and the CMA in order to avoid any shock to the system. “We have expressed our initiative to the CMA and SAMA officials which has been received with support”, Al-Ghalayini said. We will be presenting CMA and SAMA officials with different structures to explore the most efficient and practical method to float all licensed insurance companies. Recently, SAMA listed about 11 insurance companies which have passed the initial review and are under consideration for licensing. This list will be updated monthly. More than 30 completed insurance and re-insurance applications have been submitted to SAMA for licenses.
BMG, with its focus on advising the family business to merge, acquire, divest or go public, has been involved actively in advising the telecom and insurance sectors. BMG has organized last June the first Saudi insurance forum in association with SAMA.
