Kathmandu: The youngest life insurer, Mahalakshmi Life Insurance, has called for additional 50 percent capital with existing promoter shareholders in the first phase under its Capital Plan. As per the special decision of the Special General Meeting(SGM) of the company held on 25th of Baishakh, notice has been issued to the promoters for additional 50 percent share capital that amounts to Rs.700 million.
At present, the company’s paid up capital is Rs. 1.40 billion. The paid up capital of the company will reach Rs. 2.10 billion. The company will soon issue a 30 percent IPO to raise Rs. 900 million from the public. If everything goes as planned, the company’s paid-up capital will reach Rs. 3 billion after the IPO.
Further, the management of the company has planned to distribute 10 percent bonus share after IPO. Still, it’s paid-up capital will not meet the regulatory requirement. As per the fresh provision, the regulatory paid-up capital for life insurer is Rs. 5 billion. The company plans to merge for insufficient capital by paying bonus shares.
The company plans to raise Rs 5.20 billion, including Rs 2.20 billion from the merger with 50 percent promoter capital, an IPO of Rs 900 million and 10 per cent bonus shares.
The Insurance Board had directed all life insurance companies to increase the minimum paid-up capital to Rs. 5 billion on April 24. The IB has given deadline of mid-April 2023 to meet the minimum paid-up capital requirement.