Kathmandu: The merger process between Ajod Insurance and United Insurance has kicked off with the memorandum of understanding (MoU) between these two companies on Tuesday. Ajod Insurance opted for merger with United Insurance following the termination of merger agreement with Prabhu Insurance.
Rabindra Raj Pant, director of United Insurance, and Chiranjeevi Dawa, director of Ajod Insurance, signed the preliminary agreement on Tuesday. They signed in the presence of United president Ravi Bhakta Shrestha and Ajod Insurance’s president Ajad Shrestha. According to the MoU, a swap ratio of 100 equal to 90 has been agreed upon between United Insurance and Ajod Insurance. Now, after the completion of the merger process, the 100 shares of Ajod Insurance’s shareholders will be converted to 90 shares of the new company that comes into existence after the merger.
It has been agreed that the name of the company formed after the merger will be United Ajod Insurance. It is said that Kumar Bahadur Khatri of Ajod Insurance will continue the charge of chief executive officer.
The merger between Prabhu Insurance Company and Ajod Insurance Company terminated following the denial of Prabhu Insurance to abide by the swap ratio agreed upon initially. The two companies had agreed to merge on Asar 32, 2079 at a ratio of 100 to 70. But Chairman Bhattacharya insisted to offer only a 100: 60 swap ratio for the shareholders of Ajod Insurance. Ajod Insurance is backed by the promoter of Bhatbhateni Super Departmental Store.
When Ajod Insurance tried to convert the shares of the promoter shareholders to public shares, the Prabhu Group showed their objection. But Ajod Insurance has converted the share to the public with a nod from the Nepal Insurance Authority. According to the new share capital structure, the shareholding of promoters has declined to 51 percent from 70 percent.
Nepal Insurance Authority had allowed Ajod and Prabhu Insurance to terminate their merger process upon the
