Kathmandu: Prabhu Life Insurance Company and Mahalakshmi Life Insurance Company have signed a memorandum of understanding (MoU) for merger. Today, Subash Amatya, the chairman of Prabhu Life and Manoranjan Raman Sharma, the chairman of Mahalaxmi Life have signed the MoU at a ceremony held today at Hotel Aloft.
The SGM of both company has already delegated authorities to the BODs for merger and acquisition with any other life insurer to meet the minimum paid-up capital requirement. The integrated company will be named Prabhu Mahalaxmi Life Insurance Company Limited.
After the successful closure of merger agreement, the promoter to public shareholder’s ratio will be 85:15. As per the Directives of Insurance Board, the minimum public holding must be 30 percent in any insurance company. So, it is expected that the integrated company will raise the additional capital through further public offering(FPO).
It has been learnt that Chairman Subash Amatya and CEO Santosh Prasain will continue their role in the integrated company. It has been agreed that the swap ratio will be on equal footing i.e. 1:1.
The paid-up capital of Prabhu Life Insurance is Rs. 2 billion and the paid-up capital of Mahalakshmi Life Insurance is Rs. 2.10 billion. After the merger, the paid-up capital will be Rs. 4.1 billion rupees.
Prabhu Life’s reserve fund has Rs.455.4 million and Mahalakshmi Life’s reserve is Rs. 222.2 million. Prabhu Life’s life insurance fund has accumulated Rs. 2.71 billion and Mahalakshmi’s life insurance fund has accumulated Rs. 1.98 billion.
Prabhu Group is the major promoter behind Prabhu Life Insurance while Mahalaxmi Life has mixed group of promoters from commercial banks to traders.
