March 14: Sagarmatha Insurance Company and Lumbini General Insurance Company have completed the merger process and started integrated business under the name of Sagarmatha Lumbini Insurance Company.
These companies signed the agreement for the merger on June 14 and completed the merger process in 8 months before starting integrated business.
According to the latest provisions regarding merger and acquisition, the merger and acquisition process must be completed within six months of the agreement. These two companies were given final approval for merger by Nepal Insurance Authority on February 28 and Securities Board of Nepal on March 7. The Company Registrar's Office gave approval for the merger on March 3.
The Nepal Insurance Authority has arranged to maintain paid-up capital of Rs 2.5 billion for non-life insurance companies and Rs 5 billion for life insurance companies within mid-March. According to the same arrangement, these two companies chose the path of merger for capital increase.
Before this, the merger process between Siddhartha Insurance and Premier Insurance, Himalayan General Insurance and Everest Insurance, Sanima General Insurance and General Insurance Company were completed towards non-life insurance segment.
Currently, the paid-up capital of Sagarmatha Insurance is Rs 1.33 billion. The proposal to distribute 12.40 percent bonus shares based on the same capital was passed by the company's annual general meeting held on February 23. After issuing the bonus shares, the paid-up capital of Sagarmatha Insurance will increase to Rs 1.49 billion.
Similarly, Lumbini General Insurance Company also passed the proposal to issue 6.99 percent bonus shares based on the paid-up capital of Rs 1.31 billion in the annual general meeting held on February 23. After issuing the bonus shares, the paid-up capital of Lumbini General Insurance will reach Rs 1.44 billion.
After the bonus shares of both the companies are issued, the paid-up capital of the company formed after the merger will stand at Rs 2.620 billion. Sagarmatha Insurance and Lumbini General Insurance have entered into a merger by maintaining a swap ratio of 100 to 80 shares.
The share trading of both the companies was suspended since the day the integrated business started. According to the latest regulations, stock trading will be stopped for a maximum of 15 business days after the start of integrated transaction.
Former Lumbini General Insurance Chairman Manohar Das Mul has been appointed as the chairman of the company formed after the merger. The newly appointed Chairman Mul took the oath of office and secrecy in front of the Chairman of Nepal Insurance Authority Surya Prasad Silwal on Monday.
On behalf of former Sagarmatha Insurance Company, Ajith R. Gunawardena, Siddhartha Mani Rajbhandari, Gajendra Lal Shrestha are among the directors of the company
Similarly, Arun Raj Shrestha and Kamal Bhattarai are in the board representing former Lumbini General Insurance.