Share Conversion of Ajod Insurance May Create Hurdle for Merger With Prabhu Insurance

Kathmandu: The merger process between Prabhu Insurance Company and Ajod Insurance Company has come to a halt amid the issue of share conversion of Ajod Insurance.

The existing promoter to public shareholding ratio of Ajod Insurance is 70:30 while of Prabhu Insurance it’s 51:49. The promoters of Ajod Insurance are mulling to convert their share holding to 51:49 prior to reaching final agreement with Prabhu Insurance. But sources confirm that the promoters of Prabhu Insurance are against the share conversion of Ajod Insurance.

Prabhu Insurance and Ajod Insurance had signed the merger agreement on Asar 32, 2079. The promoter share holders of Ajod are not satisfied even with the swap ratio of 1:0.7. Prabhu Insurance has been able to get high valuation compared to Ajod Insurance due to its real estate in Tinkune and the promoter share of Nepal Reinsurance Company.

Ajod’s share’s value is higher than Prabhu’s in the secondary market. Also, Ajod is very aggressive in earning insurance fees and expanding non-life insurance business.

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