January 12, 2023 | Investopaper
Prabhu Insurance Company Limited (PRIN) and Ajod Insurance Company Limited (AIL) have broken the merger agreement. Due to dispute over share swap ratio and other issues, the companies have decided to go their separate ways.
Both the companies had signed a preliminary agreement (MOU) for merger on Ashad 32, 2079 BS. As per the agreement, the companies had agreed to merge in the ratio of 100:70. This means that every 100 shares of Ajod Insurance would convert into 70 shares after the merger.
As per the direction of Nepal Insurance Authority, the regulatory body, the non-life insurance companies are required to meet the minimum capital of Rs. 250 crores by the end of Chaitra, 2079 BS. Hence, these two life insurance companies had opted for merger in order to reach the capital requirement.
At present, Prabhu Insurance has a paid-up capital of Rs. 128.97 crores while Ajod Insurance also has a paid-up capital of Rs. 100 crores.
Previously, Himalayan General Insurance Company Limited (HGI) and Everest Insurance Company Limited (EIC) have already merged and have commenced joint operation from Shrawan 1, 2079 BS. Likewise, Sanima General Insurance (SGI) and General Insurance (GIC), have completed merger and started integrated transaction from Karthik 7, 2079 BS.