Green Delta to sell 10pc stake to IFC
Local insurance giant Green Delta has reached final stages to sell its 10 percent share to the International Finance Corporation (IFC), a wing of the World Bank Group, a top official of the insurer said.
Green Delta's board approved the proposed subscription of the IFC on Thursday last.
“We'll issue new shares for the IFC subject to the approval of regulators,” Nasir A Chowdhury, managing director of Green Delta Insurance, told The Daily Star yesterday.
The present paid-up capital of the non-life insurer is at Tk 51 crore. So, the issuance of 10 percent new shares will raise the capital by Tk 5.1 crore to Tk 56.1 crore.
Both parties agreed that price per share would be set based on the average price for six months preceding the date of subscription by the IFC, but the price will no way exceed Tk 165 a share. Each Green Delta share was traded at Tk 91 on the Dhaka Stock Exchange on Thursday.
According to Green Delta, the IFC has been in talks with them for more than one year to buy the shares.
“The IFC has meticulously been examining our activities -- from insurance premium to reinsurance and claim settlement,” said Chowdhury.
He said the IFC's entry will add further value to the company.
“It'll not only help us in doing international business, but also improve corporate governance,” said Chowdhury who has been in the insurance industry for more than 50 years.
He said the deal might be settled in two months subject to the approval of the board of directors of the IFC, general shareholders of Green Delta and regulators that include Securities and Exchange Commission (SEC) and Insurance Development and Regulatory Authority (IDRA).
“We'll formally seek permission from the SEC and IDRA in a couple of days,” he said.
Green Delta, which started its business with a paid-up capital of Tk 3 crore in 1985, has become the country's leading private non-life insurance company. The company is listed on both Dhaka and Chittagong stock exchanges.
In 1997, the insurer participated in equity investment to establish Delta Brac Housing and in 2005, it sponsored a joint venture consortium firm, Green Delta Aims Ltd.
In 2011, the company floated its very first subsidiary Green Delta Financial Services Ltd, a stock brokerage firm.
Presently, the insurer operates its business through 36 branches and has employed more than 600 people.