Salama Capital Restructuring Completed as Islamic Arab Insurance Restores Strong Solvency
Salama completes capital restructuring with Dh456m reduction and Dh155m mandatory convertible sukuk, restoring solvency and UAE Central Bank compliance.
Salama, the Islamic Arab Insurance Company, announced the successful completion of its capital restructuring programme, saying the move has restored the firm’s financial strength and brought it fully in line with UAE Central Bank requirements. The Salama capital restructuring included a Dh456 million reduction in capital alongside the issuance of Dh155 million in mandatory convertible sukuk and new equity, steps the company says have strengthened its balance sheet. Company leaders framed the exercise as a decisive turnaround aimed at preserving solvency and supporting long-term sustainability.
Company Confirms Completion of Restructuring
Salama issued a formal statement confirming that the restructuring programme has concluded and that the group now meets regulatory capital thresholds established by the UAE Central Bank. The company attributed the successful outcome to the coordinated execution of a planned capital reduction, bond issuance and equity measures designed to shore up its solvency metrics. Management emphasized that the measures were implemented within the statutory and supervisory framework applicable to insurers operating in the UAE.
Capital Reduction and Funding Details
The restructuring entailed a capital reduction of Dh456 million and the successful placement of Dh155 million in mandatory convertible sukuk, together with the issuance of new shares to strengthen equity. The sukuk are structured to convert into equity under the terms approved by the company, providing an immediate uplift to regulatory capital once conversion occurs. Salama characterised the combination of reduced nominal capital and fresh convertible funding as a pragmatic approach to recalibrate its capital base while preserving liquidity and policyholder coverage.
Regulatory Compliance with UAE Central Bank
Salama said the outcome restores its capital adequacy to “strong levels” consistent with the prudential requirements of the UAE Central Bank, aligning its risk-based capital metrics with current supervisory expectations. The company indicated that the restructuring was carried out with full regard to regulatory oversight and that the strengthened capital position will be periodically reviewed under the central bank’s supervisory regime. Restoring compliance was presented as a key objective of the programme and a precondition for sustained operations in the UAE insurance market.
Board Statement Emphasizes Long-Term Financial Stability
The chairman, Issa Ali bin Salem Al Zaabi, described the completion of the transition as evidence of the board’s commitment to restoring financial resilience and supporting the company’s long-term viability. He said the restructuring reflects a strategic decision to stabilise the balance sheet and create a platform for future growth, while protecting the interests of policyholders and stakeholders. The board reiterated its focus on governance, capital management and transparent communications with regulators and investors as the company moves forward.
Effects on Policyholders and Market Confidence
Salama indicated that the restructuring enhances its capacity to meet policyholder obligations and strengthens its claims-paying ability, which management said is central to the insurer’s business model. Market participants are likely to view the restoration of solvency and regulatory compliance as positive for confidence in Salama’s operations and for the broader Islamic insurance segment in the UAE. Observers will monitor financial statements and regulatory disclosures to assess whether the capital measures translate into improved underwriting and investment stability over coming quarters.
Next Steps for Shareholders and Governance
The company said it has completed the issuance steps and will continue to communicate details of any conversion timelines, shareholder allocations and governance implications through formal channels. Shareholders can expect further information on share issuances, conversion mechanics and how the capital changes affect ownership percentages and voting rights. Salama also signalled ongoing attention to internal controls, capital planning and alignment with best practices in corporate governance as it seeks to rebuild investor trust.
The completion of Salama’s capital restructuring marks a significant corrective step for the insurer and provides a clearer starting point for management and regulators to evaluate future performance. Investors and policyholders will be watching forthcoming financial reports and regulatory filings for confirmation that the new capital mix delivers sustained solvency and operational stability.
