At the recent 16th Board of Directors meeting held on Bhadra 7, a significant decision was made to distribute a 10% bonus share and a 0.526% cash dividend, including tax, to shareholders. This move aims to enhance the company’s capital base from the existing paid-up capital of Rs. 4.29 Arba.
The company plans to issue 7% right shares after adjusting for the allocation of the 10.526% bonus shares. With the bonus shares added, the paid-up capital is set to rise to Rs. 4.72 Arba.
However, despite this increase, the company will still fall short of the Rs. 5 Arba minimum capital requirement established by the Nepal Insurance Authority (NIA) for life insurance companies. To close this gap, the company has proposed issuing an additional 7% rights issue, post-bonus share adjustment, in an effort to comply with the NIA’s capital mandate.
This capital enhancement is critical for the company to maintain its growth trajectory and regulatory compliance, ensuring a more robust financial standing in the competitive life insurance sector.