General Insurance Company (GIC) and Sanima General Insurance (SGI) Ink MoU For Merger

General Insurance Company Nepal Limited (GIC) and Sanima General Insurance Limited (SGI) have written an official letter to Nepal Stock Exchange (NEPSE). GIC and SGI 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 preliminary MoU was signed on 29 Ashad at 6 P.M.

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.

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 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 the institutions.