Kathmandu: General Insurance Company(GIC) has proposed for 30 percent right share offering of current paid-up capital. The board of directors of the company has submitted a proposal to the Insurance Board(IB) for right share issuance.
The company currently has a capital of only Rs. 1 billion. If the regulatory authority, IB, gives nod for right share issue, the paid-up capital will reach Rs. 1.30 billion. The company’s reserve fund has Rs. 160 million.
The company has proposed for the right share to meet the new regulatory capital requirement. As per the fresh directives of the IB, the minimum paid-up capital for non-life insurers is Rs.2.5 billion which is more than double of existing paid-up capital.
It has been learnt that GIC aims to maintain a paid-up capital of Rs 1.5 billion including the 30 percent right shares and Rs. 200 million in bonus shares. Even after that, the company does not reach one billion. But at this stage, GIC will have competitive bargaining power for merger or acquisition.
