Salama's Shareholders Approve Major Capital Restructuring Strategy to Enhance Financial Stability and Compliance

Salama's Shareholders Approve Landmark Capital Restructuring

In a significant move to bolster its financial health, Islamic Arab Insurance Company (Salama), one of the leading Takaful providers in the UAE, has received shareholder approval for a comprehensive capital restructuring strategy. This decision was made at the General Assembly meeting held on October 16, 2025. The approved strategy includes a capital reduction aimed at offsetting accumulated losses and the cancellation of treasury shares, which is essential for reinforcing the company's balance sheet.

Following this approval, and pending final regulatory endorsements, Salama plans to issue up to AED 175 million in Mandatory Convertible Sukuk (MCS) through a special purpose vehicle. The issuance targets a select group of strategic investors, demonstrating significant investor interest and confidence in Salama's governance and market position. These Sukuk would be mandatorily converted into new shares, ensuring a robust influx of capital that will strengthen Salama’s position in compliance with the requirements of the Central Bank of the UAE.

The approval represents a crucial step in Salama's ongoing mission to enhance solvency, regulatory compliance, and provide a stable foundation for future growth. The company’s Group CEO, Mohamed Ali Bouabane, stated, "This plan underlines our commitment to fortify Salama's financial structure while ensuring we meet all regulatory standards. The backing from our shareholders and strategic investors affirms our solid fundamentals and long-term stability."

Looking towards the future, Salama aims to generate substantial value for shareholders by maintaining stringent underwriting practices, optimizing expenses, strategically deploying capital, and delivering superior claims service. These efforts are designed to evolve the company into a simpler, more resilient organization.

This capital restructuring is not just a response to accumulated losses but a strategic initiative to pave the way forward. Salama’s diverse portfolio, spanning various product lines and geographies, positions the company to explore multiple avenues for sustainable growth. Recent financial results further showcase Salama’s commitment to recovery and growth; the first half of 2025 saw total equity rise to AED 351.84 million, marking a 5.2% increase year-on-year, alongside a net profit of AED 8.25 million through disciplined operations and improved management.

In additional encouragement, SP Global Ratings recently reaffirmed Salama's long-term issuer credit and insurer financial strength rating at 'BBB-' with a Developing outlook. This recognition signifies Salama's enhancing fundamentals and progress towards achieving a bolstered capital structure, further establishing its reputation as a reliable Takaful provider.

About Salama Islamic Arab Insurance Company

Founded in 1979, Salama is recognized as one of the largest and most established providers of Shariah-compliant Takaful solutions globally, traded on the Dubai Financial Market. The company boasts a paid-up capital of AED 939 million and has been pivotal in the development of Takaful practices within the region. Salama's focus remains on providing a diverse and competitive range of Takaful solutions inclusive of family, motor, health, and general insurance, while ensuring its operations are customer-centric and aligned with Takaful principles. With a strong emphasis on strategic growth, Salama is dedicated to being the preferred partner for its customers and stakeholders alike, committed to shaping a prosperous future together.