Kathmandu: A meeting of the BOD of Nepal Reinsurance held on Monday has declared 20 percent dividend. The board of directors has proposed to provide 16.5 percent bonus share and 3.5 percent cash dividend of the existing paid up capital.
This is the first time the company has declared a dividend. The company has stated that the dividend has been proposed from the accumulated profits so far. The company has been seeking proposals from the government for additional capital to further expand its business in reinsurance.
The approval of the Ministry of Finance and Beema Samiti,the regulatory authority, must be obtained to change the capital size. As the government of Nepal has the largest ownership in the company, the consent of the government will have to be obtained.
The company has stated that the proposal for right share issue will be proposed when the AGM is called after the approval of the GoN and Beema Samiti. The company has demanded approval for the issuance of 100 percent rights shares with the Ministry of Finance. But the company has informed that it will be finalized only after the government gives final approval.
Currently, the company’s paid-up capital is Rs 10 billion. After the proposed bonus share distribution, the company’s paid-up capital will reach Rs 11.65 billion. The company has been saying that it needs more capital to expand its branch network in India and other countries. On the other hand, the company has been demanding capital to expand its business and compete with the new reinsurance company.