Published On: June 1, 2022 06:30 AM NPT By: Republica | @RepublicaNepal
KATHMANDU, June 1: Everest Insurance Company (EIC) and Himalayan General Insurance Company (HGIC) have called their special general meetings to endorse their merger plan.
Both the insurers are conducting their special general meeting on June 16. Earlier, the Insurance Board (IB) had given the letter of intent to both of these insurance companies.
To carry forward their unification plan, EIC and HGIC have agreed to fix a swap ratio at 1:0.85, which means 100 units shares of EIC will be equivalent to 85 units of shares of HGIC. These insurers inked a memorandum of understanding for merger on May 5.
The unified entity will have the capital base of Rs 2.43 billion after merger. The entity will be named Himalayan Everest Insurance Limited.
Giving a deadline of mid-April 2023, the IB has been pushing the insurers to either increase their capital base or go into a merger if they fail to do so. While life insurers will have to increase their paid-up capital to Rs 5 billion from the existing Rs 2 billion, non-life insurers will have to raise their capital to Rs 2.50 billion from Rs 1 billion.
With the regulator’s directive into effect, numbers of insurance companies have stepped up to go into merger. Apart from EIC and HGIC, other three insurers—Prime Life, Gurans Life and Union Life—have also signed an agreement for their unification.
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