Tunis Re Prepares Major Capital Operation to Double Share Capital

Tunis Re, Tunisia’s leading reinsurance company, is preparing a significant capital operation. The company plans to double its share capital from 100 million to 200 million Tunisian dinars (TND). The primary objective is to strengthen its underwriting capacity and retain a larger share of premiums currently ceded to retrocessionaires.

Operation Details

The operation, approved by the Extraordinary General Assembly on April 24, 2026, and cleared by the Financial Market Council (CMF) on September 1, 2026, consists of two components:

New Share Issuance: The issuance of 15 million new shares at a price of 8 TND per share, resulting in a capital raise of 120 million TND.
Free Allocation: The free allocation of 5 million shares to existing shareholders.

The subscription period is open from September 15 to October 2, 2026.

Strategic Rationale: Scaling Up, Not Rescue

According to Union Capital, this operation is not a financial rescue measure. Instead, it aims to provide Tunis Re with the means to reach a new level of scale.

The company’s financial performance has shown strong momentum:

2025: Technical profit more than doubled to reach 30.1 million TND, while net profit grew by 26% to 27 million TND.
First Half of 2026: This positive trend continued, with technical profit reaching 27.6 million TND (+23%) and net profit rising by 41.7% to 24.7 million TND.

Key Focus: Premium Retention and Growth

The main strategic challenge is now premium retention. According to the business plan presented in the prospectus:

The retention rate is projected to increase from approximately 72% to 79% by 2030.
This means Tunis Re aims to keep more premiums on its own balance sheet rather than transferring them to retrocessionaires.
Revenue is expected to grow from 243.2 million TND in 2025 to 405.5 million TND in 2030, representing an average annual growth rate of 10.8%.

International Expansion

International markets remain a crucial growth axis. In 2025:

International business accounted for 58.3% of Tunis Re’s revenue, compared to 41.7% for the domestic Tunisian market.
Africa recorded growth of 12.3%, while the Maghreb region grew by 6%.

Union Capital believes that strengthening equity could also help improve the company’s credit rating and facilitate its return to certain foreign markets.

Financial Impact

Based on the projections:

Equity: Expected to reach approximately 414.5 million TND by the end of 2026.
Solvency Ratio: Projected to increase from 158% to 214%.
Technical Provisions Coverage: Coverage by investments is expected to reach 153.5%.

Investor Perspective and Valuation

For investors, the subscription price of 8 TND is the key highlight, according to Union Capital.

Theoretical Ex-Dividend Price: Estimated at 10.095 TND.
Average Valuation: Union Capital values the share at an average of 11.05 TND.
Discount: The issue price represents a 38% discount compared to this valuation.

Based on these figures, Union Capital recommends subscribing to the operation.

Important Note for Existing Shareholders

A critical point for current shareholders is the subscription ratio, set at three new shares for every four existing shares.

The theoretical value of the rights attached to existing shares is estimated at 4.095 TND per old share.
Union Capital advises shareholders who do not wish to participate in the capital increase to consider selling their rights rather than letting them expire.

Risks and Conditions

The success of this operation is conditioned by several factors. Union Capital highlights the following risks:

Exchange Rate Risk: In 2025, net exchange losses reached 21.1 million TND, constituting a significant source of earnings volatility.
Loss Ratio: The level of claims and losses.
Credit Rating: The company’s rating status.
Market Access: Conditions for accessing international markets.

Conclusion

Ultimately, the success of this operation depends less on the capital injection itself and more on Tunis Re’s ability to transform these additional funds into:

Higher retained premiums.
Increased international activity.
Sustainable return on invested capital.

This is, in essence, a bet on the company’s change in scale rather than a financial turnaround.

Disclaimer: The projections and recommendations cited in this article are those of Union Capital and do not constitute a guarantee of future performance. The note itself specifies that investors must evaluate the operation in light of their own strategy and financial situation.