Bupa Arabia seeks to raise cash

Bupa's Saudi subsidiary will seek to raise money on the stock market in an initial public offering that may take place early in 2008.

The Saudi government has granted approval to Bupa Arabia to operate as a licensed co-operative health care insurance company in the kingdom, one of the potentially most lucrative markets in the world.

Bupa Arabia, currently known as Bupa Middle East, will have a capital of 400 million riyals as soon as it starts operating. It will soon hold its initial public offering (IPO) where 40 percent of its stocks will be offered to the public. In line with central bank regulations for newly licensed insurance firms, this means the company would offer 16 million shares at 10 riyals each.

The Jeddah-based firm will be the only single-line insurer in Saudi Arabia specialising in health insurance.

The firm has been active in the kingdom for 10 years and serves over 370,000 clients.

Saudi Arabia plans to make health insurance compulsory for all the indigenous population and for all expatriate workers.

The government has given licences to 26 insurance firms and is considering applications by 10 others to try to open up the insurance sector in the world's top oil exporter.

Saudi Arabia, the largest Gulf Arab economy, is one of the world's most under-insured areas, partly due to a belief among some Muslims that insurance could indicate a lack of religious faith.


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