KATHMANDU, July 17: Prabhu Insurance Limited (PIL) and Ajod Insurance Limited (AIL) have agreed to go into a merger.
PIL board member Rajendra Malla and AIL board member Chiranjibi Dwa, in this regard, inked a memorandum of understanding on Saturday. The swap ratio of PIL and AIL has been fixed at 100:70, which means AIL shares priced at Rs 100 per unit will be equivalent to Rs 70 per share of PIL.
The unified entity will conduct its joint transaction under ‘Prabhu Insurance.’ AIL’s Chairman Ajad Shrestha will be the chairman of the new entity while PIL’s chief executive officer Sanchit Bajracharya will work as the CEO of the combined insurer.
At present, PIL and AIL have paid-up capitals of Rs 1.28 billion and Rs 1 billion, respectively. The merged entity will have a paid-up capital of Rs 2.28 billion. The new insurance company has planned to issue right shares to raise their working capital to Rs 2.5 billion, the minimum threshold set by the regulator for non-life insurers to be effective from mid-April, 2023.
Meanwhile, Prabhu Life Insurance and Mahalaxmi Life Insurance also signed an agreement to merge last week. The insurers have sought to maintain the swap ratio at 1:1.
Similarly, Himalayan Everest Insurance, the organization formed after merging Himalayan General Insurance and Everest Insurance, has started its integrated transaction from Sunday.