Janashakthi to sell its General Insurance

One of Sri Lanka’s leading insurance companies, Janashakthi Insurance has decided to sell its fully-owned subsidiary involved in general insurance, adding that it planned to repurchase a substantial portion of shares after the sale.
According to a filing at the Colombo Stock Exchange, the Board of Directors of Janashakthi Insurance has authorized in-principle the sale of Janashakthi General Insurance.

With no disclosure on the buyer, the firm said the terms of the sale were still in the final stages of negotiation.
The company said that the transaction would be subject to shareholder approval and the Insurance Regulatory Board’s regulatory requirements, as it was a major transaction for Janashakthi Insurance.

The company also said that it was agreed in-principle that Janashakthi Insurance would implement a substantial repurchase of its shares following the sale.
According to the stock exchange filing, the terms of the repurchase will be based on the terms of the sale of Janashakthi General Insurance.

The company expects the agreement for the transaction to be finalized shortly.
The share price of Janashakthi Insurance surged early this week amidst speculation of a possible sale of the general insurance unit to a foreign firm.

On Tuesday (30), Janashakthi Insurance saw its share price jump Rs 2.60 to close at Rs 20. As at the end of Thursday’s trading (01), the share price increased Rs 1.60 to close at Rs 21.60.