Premier’s special AGM on April 20 to issue 1:1.15 right shares

ShareSansar, April 16:

After the merger process between Premier Insurance Company (Nepal) Limited and Neco Insurance Company Limited broke down in March, Premier has decided to convene its special AGM to formally revoke the merger and to issue 1:1.15 right shares instead to meet its paid-up capital requirement.

Premier will hold its special AGM on April 20 at its head office at Narayanchaur, Naxal, which, among other things will endorse 1:1.15 right shares, and to shore up the paid-up capital accordingly.

ShareSansar had been reported about the possibility of Premier's 1:1.15 right share since last month.

The company is planning to raise its authorized capital to Rs 75crore and paid-up to Rs 50 crore, according to the special AGM notice issued by Premier today.

Following the breakdown of merger deal in March, Neco has already held its special AGM to issue 1:0.8488 right shares worth Rs 11.47 crore to meet the paid-up requirement.

It may be noted that during the regular AGM of the company two months ago, many shareholders were not happy with Neco’s plan to opt for merger.

But Neco management had still tried to push with the merger process to shore up its capital base to Rs 20 crore within the current fiscal year as directed by the Insurance Board, the regulator, for the non-life insurers.

Neco and Premier Insurance had signed a memorandum of understanding in November end for the merger.

Following the MoU, both the insurance companies had even filed an application for the LOI at the Insurance Board in December.

Nepal Stock Exchange Limited (NEPSE) then suspended the trading of the shares of both the companies due to the merger process.