EIC and HGI Merger Highlights; Swap Ratio Fixed At 85: 100

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.

The swap ratio which has been fixed by DDA between the two companies is stated to be 85: 100, which rather means the number of EIC shareholders is now set to decline by 15 percent.

For example, if a shareholder of EIC had 100 shares then his shares would be reduced to 85 shares in the newly merged company i.e 'Himalayan Everest Insurance Company Limited'. However, the shares of HGI shareholders would remain unchanged in the new company.

Following the merger, the central office will be located at Babar Mahal, which is now the Himalayan office. Everest Insurance has previously issued a request for proposals for the sale of the company's headquarters facility.

The legal process for the integrated business will begin as soon as the two companies pass the special resolution of the merger at the extraordinary general meeting scheduled to be held on 2nd Asadh, according to the corporation.

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. 

Even after the merger, the capital of these companies will reach only Rs 2.35 Arba. At present, the paid-up capital of Himalayan General is Rs 1.17 Arba and that of Everest Insurance is Rs 1.18 Arba.