Final Merger Agreement Between Lumbini General Insurance & Sagarmatha Insurance Completed; Company to have Joint Paid-Up Capital of Rs. 2.62 Arba

Lumbini General Insurance Limited (LGIL) and Sagarmatha Insurance Company Limited (SIC) final agreement regarding the merger has been completed.

The agreement between the two organizations states that Sagarmatha Lumbini Insurance Company Limited will be the name of the company following the merger. Also, At the upcoming joint annual meeting, a special proposal about the merger will be considered.

The share exchange ratio (also known as the "Swap Ratio") between Sagarmatha Insurance Company Ltd. and Lumbini General Insurance Company Ltd will be maintained at 100:80 in accordance with the initial agreement between the two companies and the DDA Report.

Additionally, the paid-up capital of the company that will be maintained following the merger will be Rs. 2,62,26,38,195 (Rs.2.62 Arba) after adjustment and distribution of the proposed bonus shares for the Fiscal Year 2078–2079.

For FY 78/79, SIC proposed to distribute 12.40% bonus shares and 0.6526% cash dividend on the paid-up capital of Rs. 1.33 Arba, whereas LGIL proposed 7% bonus shares and 0.35% cash dividend. 

After the merger, the board of directors will consist of 3/3 of the members from each company and one independent director. One member from Lumbini General Insurance Company Ltd will serve as board chairman, and the chief executive officer will be presented on behalf of Sagarmatha Insurance Company Ltd.

Since the Insurance Regulatory 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.