CIESOT to sell more Ceylinco Insurance shares

Following Mitsui Sumitomo Insurance's 6 per cent purchase in Ceylinco Insurance this week, the local insurer is looking to shed more stakes, officials said.

“We want to shed the balance 6 per cent ( ideally) that CIESOT Ltd ( Ceylinco Insurance Employee Share Ownership Trust of Ceylinco Insurance), an employee share ownership trust of Ceylinco Insurance, has in the company. This is in line with the Securities and Exchange Commission's regulation on Employee Share Option Schemes ( ESOS)," an official told the Business Times. This rule says that an ESOS can’t hold more than 5 per cent in a listed entity. CIESOT, the largest shareholder of Ceylinco Insurance held 22.8 per cent earlier this year.

In May, Shriram City Union Finance Ltd, a Chennai- based nonbanking finance company and a part of Shriram Group, bought some 6 per cent of CIESOT held shares, while 2 per cent was bought by the number three shareholder of Ceylinco Insurance, Banque Pictet & Cie SA bringing its total ownership in CIESOT to 13 per cent. According to the official, they will be happy to sell the balance 6 per cent as well. He said that their latest buyer, Mitsui had approached them to purchase this stake in CIESOT. "At the moment there are similar inquiries."

Ceylinco Insurance last year posted Rs. 25.2 billion in premium income — equivalent to sales for ordinary businesses — and Rs. 3.96 billion in consolidated pretax profit. Ceylinco, established in 1987, also runs nonlife insurance operations in Nepal and the Maldives through affiliates.