Kathmandu: Sanima Life Insurance Company and Reliance Life Insurance Company have sign a memorandum of understanding for merger. The representatives of BODs of both companies have signed the MoU today at Hotel Marriott.
Ghanshyam Thapa, Member of BODs of Sanima Life and, Bharat Kumar Todi, Member of BODs Reliance Life have signed the MoU in the presence of Chairman Tara Chand Kedia.
Both companies have jointly submitted an application to the Insurance Board for in-principle approval. If the merger succeed, on an equal footing, the paid-up capital of the integrated company will reach Rs 4.18 billion. At present, Sanima Life’s paid-up capital is Rs 2.8 billion while Reliance Life has Rs. 2.10 billion paid-up capital. Both companies have stated that the swap ratio will be decided only after due diligence audit(DDA).
Sanima Life is the venture of Non-residents Nepalese(NRN) led by Jiwa Lamichhane while Kedia Organization is the major promoter behind Reliance Life. Both life insurers came into existence on year 2074. After the merger, the integrated company is expected to issue rights shares to meet requirement for minimum paid up capital.
As per the recent circular of the Insurance Board, life insurers must maintain at least Rs. 5 billion paid up capital by the Chaitra end of year 2079.