Consortium to invest Rs. 700 m in MBSL Insurance

Tuesday, 8 January 2019 00:16 - - {{hitsCtrl.values.hits}}

A consortium of investors is to infuse Rs. 700 million in to MBSL Insurance Ltd., as part of an overall initiative to recommence the business.

The Merchant Bank of Sri Lanka and Finance Plc (MBSL) insurance subsidiary is currently suspended due to failure to comply with minimum capital requirements stipulated by the insurance regulator IRCSL.

Daily FT learns the investor is United Capital Holdings Ltd., which includes a consortium comprising institutions and individuals.

MBSL will invest a further Rs. 500 million bringing the capital infusion to Rs. 1.2 billion.

MBSL said it has entered into an investment agreement on 31 Dec. 2018 with a strategic investor for the purpose of capital infusion of Rs. 700 million and MBSL will invest the balance Rs. 500 million.

The relevant approval from IRCSL has been obtained and the MBSL and strategic investor intends to conclude the proposed capital infusion of Rs. 1.2 billion in insurance venture before 31 January this year.

As at 31 December 2017, MBSL has made an impairment provision of 95.9% of the investment in the insurance subsidiary. MBSL shares are currently in the Watch List by the CSE as the FY17 audited accounts contained an emphasis of matter on going concern pertaining to insurance subsidiary.