Sagarmatha Insurance (SIC) and Lumbini General Insurance (LGIL) Opts Merger Route To Enhance Their Capital

Sagarmatha Insurance Company Limited (SIC) and Lumbini General Insurance Limited (LGIL) have written an official letter to Nepal Stock Exchange (NEPSE). GIC and SIC have requested to suspend the trading of shares of these two companies due to merger purpose.

The Board of Directors meeting of both the companies approved the draft Memorandum of Understanding (MoU) regarding the merger and the MoU was signed on 30 Ashad at 9 A.M.

The MoU has been signed by Mr. Lokmanya Golchhale on behalf of SIC and Mr. Arun Raj Shrestha on behalf of LGIL.

Since the Insurance Regulatory Authority Committee issued a directive to increase the capital within a year, insurance companies have started merging up. The committee has set a minimum capital of Rs 2.5 Arba for non-life insurance companies. Further stating that this limit should be reached by Chaitra 2079.

At present, the share capital of SIC and LGIL is Rs. 1.33 Arba and Rs. 1.31 Arba. 

Also, the last trading price of SIC and LGIC is. Rs. 870 and Rs. 382 respectively.

Even though the MoU has been signed, the swap ratios between the two companies are yet to be decided and will be finalized later based on the Due Diligence Report of both institutions.