QLM Life & Medical Insurance Company has announced its initial public offering (IPO) of 210mn shares, representing 60% of the shares of the company. QLM’s shares are worth QR3.15 per offer share, or a total size of QR659.4mn, excluding the offering costs of QR0.01 per share.
The offer shares being offered by the sole selling shareholder, QIC, which will retain 25% of QLM’s share capital post-IPO. The IPO proceeds, net of the offering, and listing fees will be retained by the selling shareholder.
To the extent that the actual offering and listing expenses incurred exceed the total offering and listing fees collected, the selling shareholder shall be responsible for the payment of the offering and listing expenses.
The share capital structure of the company will be adjusted from its pre-conversion structure (35mn shares of nominal par value of QR10 each) to its post-conversion structure (350mn shares of nominal par value of QR1 each). The total nominal share capital of the company will remain at QR350mn.
During this process, the founders will maintain their respective percentages of ownership in the company. QLM’s market capitalisation at IPO is QR1.099bn, which divided by the post-conversion number of offer shares results in an offer price of QR3.15 per offer share, consisting of the nominal value of QR1, a premium of QR2.14, and the offering and listing fees of QR0.01. The IPO subscription period opens on Thursday, December 10 and ends on Wednesday, December 23. It is proposed that allotment of offer shares and refunds of excess application amounts, if any, will occur by December 29.
The company’s conversion into a Qatari public shareholding company and issuance of its amended commercial registration is expected to be completed on December 31, with its shares expected to be listed on the Qatar Stock Exchange in early January 2021 once final regulatory approvals are obtained.
The offering will be divided into two tranches. In the first, 157.5mn offer shares, equivalent to 45% of the company’s share capital, have been reserved for individual and corporate investors.
Offer shares in the first tranche shall be allocated as first to individual investors, and if the number of offer shares requested by individual investors exceeds the number of offer shares, then the offer shares shall be allocated on a pro-rata basis to individual investors.
If any offer shares remain, these shares shall be allocated to corporate investors, and if the number of offer shares requested by corporate investors exceeds the number of offer shares remaining, then the offer shares shall be allocated on a pro-rata basis to corporate investors; then if any offer shares remain, then they may be allocated to eligible investors at the direction of the board in its absolute discretion.
In the second tranche, the confirmed anchor investors, being the General Retirement and Social Insurance Authority (GRSIA), Doha Insurance Group, and Qatar Ports Management Company (Mwani) will subscribe to a total of 52.5mn shares, equivalent to 15% of the company’s share capital.
In the event that at the end of the subscription period a number of offer shares remain available, the remaining may be allocated to eligible investors at the direction of the board in its absolute discretion. It is proposed that allotment of offer shares and refunds of excess application amounts, if any, will occur by December 29, 2020.
Eligible investors may apply for a number of offer shares between the minimum of 500 offer shares and the maximum of 17.5mn offer shares (equivalent to 5% of the company’s entire share capital).
Investors can obtain copies of the IPO prospectus from the company’s website (www.qlm.com.qa) and can obtain information on the subscription process by contacting one of the five participating receiving banks, which are QNB, Commercial Bank, Ahli Bank, Doha Bank, and Al Khalij Commercial Bank.
It is anticipated that admission will occur on or around January 6, 2021 after obtaining the approval of the Qatar Financial Markets Authority and the Qatar Stock Exchange (QSE). After the closing date and following commencement of trading in the shares on the QSE, all eligible investors will be allowed to purchase shares on the secondary market of the QSE in accordance with the applicable rules. The shares may be freely traded and transferred in accordance with QSE rules and regulations in compliance with applicable laws in Qatar.
QLM believes that its business is characterised by competitive strengths, which will enable the company to successfully implement its strategy of maximising shareholder value by capitalising on its position in the insurance industry:
* Leading market position: The company is the largest provider of group medical insurance in Qatar based on the number of members and size of gross written premiums.
* Long-term customer relationships: The company has long-term relationships with its group medical and group/credit life insurance customers and high renewal rates, which enables it to generate recurring revenue streams.
* Strong and stable financial profile: The company’s historically-strong financial performance provides it with a competitive advantage in winning new contracts, renewing existing policies, and establishing and maintaining relationships with providers. The company’s solvency ratios have consistently been above statutory requirements.
n Broad customer base: The company has a diverse portfolio of clients, with no single customer representing more than 8% of the company’s total gross written premiums.
* Advanced proprietary information systems: The company’s IT system links the entire insurance life cycle, including client engagement, product configuration, affinity and provider networks, policy administration, premium collection, reinsurance management, accounting and business analytics, which gives the company a massive edge over competitors.
* Strong management team: The company’s management team has extensive experience in the medical and life insurance sectors, averaging over 15 years.
* Unrivalled provider network: The company has an extensive network of healthcare providers in Qatar and abroad with over 75,000 medical service providers spanning 100 countries in six continents.
* In-house capabilities: The company’s unrivalled end-to-end capabilities distinguishes it from its Qatar-based competitors and positions it to maintain market dominance. These capabilities also provide it with unique ability to support any future mandatory medical insurance schemes in Qatar.
* Superior asset management capabilities: The company has enjoyed consistent and industry-leading investment performance based on its arrangement with Epicure Investment Management, a leading asset management company.
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