Cabinet agrees to government's additional rights-share investment in Nepal Reinsurance Company

The government will make additional investment in the rights shares of Nepal Reinsurance Company Limited. Tuesday's cabinet meeting gave consent to the Ministry of Finance for this, a decision made public by government spokesperson and Education and Sports Minister Sasmita Pokharel.

The company, known as Nepal Re, currently has paid-up capital of about Rs 13.42 billion. Under the Nepal Insurance Authority's directive, a reinsurance company's paid-up capital must be at least about Rs 20 billion. The Authority had decided back in Magh 2080 to double the company's paid-up capital, and the company had already decided to raise the remaining amount by issuing rights shares.

The government holds about 44 percent ownership in the company. To maintain that proportion as capital increases, the government must invest about Rs 3.5 billion.

The capital increase process had been stalled for a long time because it remained undecided whether the government would make its share of investment, and during that uncertainty the company's share price saw unusual fluctuations in the secondary market. With the government's share investment now confirmed, the company can proceed with issuing rights shares.