Due To The Merger Process Trading of Securities For Everest and Himalayan General Insurance Company Is Halted

A memorandum of understanding (MoU) was signed on 22nd Baisakh, 2079 between Everest Insurance Company Limited (EIC) and Himalayan General Insurance Company Limited (HGI) regarding the merger between both the institution. Hence, the trading of both the securities in the secondary market is also halted from now onwards. It is clarified that the Non-life insurance company EIC and HGI will merge.

Since the Insurance Regulatory Authority Committee issued a directive to increase the capital within a year, EIC and HGI become the first insurance company to sign a merger agreement. The committee has set a minimum capital of Rs 2.5 billion for non-life insurance companies. Further stating that this limit should be reached by Chaitra 2079.

The insurance committee has also instructed not to give priority to the issue of right shares for capital increase. It is visible that the committee has attempted to lessen the range by forcing the Insurance companies to head for the merger, directing them to elevate the desired capital without issuing the right shares.

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