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Tuesday, October 4, 2011

MBSL Insurance goes for Rs.201mn private placement

By Indika Sakalasooriya

MBSL Insurance Company, a fully-owned subsidiary of Merchant Bank of Sri Lanka PLC is planning to execute a private placement amounting to Rs.201 million.

Accordingly, the insurance firm will issue 67 million Ordinary Voting Shares, which accounts for 22 percent of the company, each at Rs.3.

The objective of the private placement was to beef up the firm’s capital in compliance with the regulations set by Insurance Board of Sri Lanka (IBSL) and to strengthen the solvency of the company.

According to the information memorandum prepared on the private placement by MBSL, the proceeds of the issue will be invested in permissible assets as per IBSL guidelines.

The subscription list for the shares opened at 0900 hrs (9 a.m.) on 28 September 2011 and is scheduled to close at 1630 hrs on 30 December 2011.

The minimum subscription is 10, 000 shares and applications in excess of minimum subscription should be in multiples of 1000 shares.

As of date, MBSL owns 100 percent of MBSL Insurance. But following the private placement, the placement parties will own 22 percent of the company.

MBSL Insurance

During 2010, MBSL Insurance crossed the Rs.500 million GWP (Gross Written Premium) of Life & General Insurance Businesses generating a turnover of Rs.565 million with pre tax profit of Rs.10 million.

Until 2009, the firm was continuously making losses, and as at December 31,2009, the cumulative total loss was Rs.390 million.

MBSL Insurance was incorporated in 2004 under the name Prudential Assurance Lanka Limited to carry out both Life and General Insurance businesses. In May 2006, the company was renamed as ABC Insurance Company Limited.

Later in April, 2009, ABC Insurance Company Limited was acquired by Merchant Bank of Sri Lanka PLC (MBSL), and in May 2009 it was renamed as MBSL Insurance Company Limited.

In the field of Life Insurance, MBSL Insurance’s reinsurance is primarily placed with “Hannover Re” of Germany, one of the best known International Reinsurance Companies.

According to the firm’s website, there are six reinsurance companies for General Insurance business, arranged by the company’s broker, Interlink Insurance & reinsurance Pvt Brokers Limited of India.
The names of the reinsurance companies are, Best Reinsurance, Kuala Lumpur, General Insurance Corporation of India, Mumbai, Trust International – Bahrain , Arab Reinsurance Company, Lebanon, Milli Re – Turkey and Africa Re, Mauritius Regional Office.

source - www.dailymirror.lk