NLG launches initial public offering

KATHMANDU, MAR 30:

NLG Insurance Company’s initial public offering (IPO) worth Rs 67.5 million opened today.

The non life insurance firm has offered its ordinary shares at face value of Rs 100. Among the total 675,000 ordinary shares, 27,000 units are allotted for the company’s staffs, 33,750 units are for mutual funds and the remaining 614,250 units are meant for general public.

The IPO to be managed by Civil Capital will be closed by April 2 at soonest or by April 12 at latest in case of under-subscription, it said.

The insurance company’s paid up capital that stand at Rs 157.5 million at present will be worth Rs 225 million following the public offering.

Insurance companies have to increase their paid up capital as the regulator — Insurance Board — had directed life insurance companies to increase their paid up capital to Rs 500 million and non-life companies to Rs 250 million by the end of current fiscal year.

NLG Insurance is planning to meet the regulatory paid up capital requirement by issuing bonus and right shares to the shareholders before the end of the current fiscal year.

In order to meet the paid up capital, insurance companies are opting to issue right and bonus shares to the existing shareholders. In addition, the regulator also has been encouraging mergers between the insurance companies. Insurance firms are expected to issue right and bonus shares exceeding Rs 2.6 billion in order to meet their paid up capital requirement if they do not chose to be merged.

At present there are 25 insurance companies, 16 non-life insurance companies and nine life insurance companies with Rastriya Beema Sansthan (RBS) that provides both life and non-life services.

Source: THT