Kathmandu: Sagarmatha Insurance Company and Lumbini General Insurance Company have signed the final memorandum of understanding (MoU) for mergers. The final MoU was signed by Chairman Manohar Das Mull on behalf of Lumbini General and Chairman Ramakrishna Manandhar on behalf of Sagarmatha Insurance.
According to the MoU, it has been agreed that the name of the company formed after the merger will be Sagarmatha Lumbini Insurance Company Limited. The special proposal regarding the merger will be forwarded to the upcoming general meeting of both companies. Based on the initial agreement between the two companies and the DDA report, the share swap ratio of Sagarmatha Insurance Company and Lumbini General Insurance Company is fixed at 100:80.
After the merger and distribution of the proposed dividends, the paid-up capital of the company will reach Rs. 2.62 billion.
Similarly, the new board of directors (BODs), three board members from each company, and one independent director will be appointed. The chairman of the BODs of Lumbini General Insurance Company, Mull will chair the BODs and the chief executive officer Chunky Chhetri will take the charge of CEO of the integrated company.
This is the third final MoU reached among general insurance companies. Earlier, Himalayan General and Everest Insurance finalized a merger and conducted transactions under the brand name Himalayan Everest Insurance. Similarly, Sanima General and General Insurance too finalized a merger agreement and conducted business under the brand name Sanima GIC insurance.
The annual general meeting of Siddhartha Insurance and Premier Insurance already endorsed the merger agreement while Ajod Insurance and United Insurance Company signed the initial MoU for the merger.