Asian Life is Buying 2 Billion Shares of Yeti Airlines at 170 Rupees Per Share

Kathmandu: The Nepal Insurance Authority has given permission to Asian Life Insurance Company to purchase the shares of Yeti Airlines. Chairman Surya Prasad Silwal has said that the authority has given permission to issue 49 percent shares of Yeti Air after investing 1.75 billion rupees.

Chairman Silwal said that under the investment guidelines, we have allowed Asian Life to buy the shares of Yeti Airlines. During the DDA of Yeti Air, the price per share was seen above 180 and the authority allowed to buy shares up to 170 rupees per share.

The company had sought approval to invest in less than 50 percent of the shares. The Authority has given permission to issue 49 percent of Air’s shares.

The information officer of Asian Life, Hom Bahadur Shrestha, said that they are going to buy the shares of Yeti Airlines under the investment guidelines. The airlines had internally agreed with Asian Life to sell 50 percent of its shares and sought permission from the authority.

It has been internally agreed that Yeti Holdings will sell 49 percent shares of Yeti Airlines to Asian Life under the investment guidelines of the Authority.

Currently, the company’s paid-up capital is 2 billion 10 million rupees. The company will purchase 49 percent of the shares at a premium price. Both parties have agreed to buy and sell the said shares at a premium of Rs 70 per share at Rs 170, according to Yeti Airlines.

According to which, Asian Life Insurance will invest 1.75 billion rupees and buy 49 percent of the shares of Yeti Air. The company was started by Lakpa Sonam Sherpa and the late Angchiring Sherpa. Lakpa Sonam Sherpa is the president of the company while Angchiring’s wife Chanda Sherpa is the managing director. Sources claim that after Angchiring’s death, there were some problems in the family as well.

According to the latest credit rating of the company, in the nine months of 2021/22, the business was worth Rs.The company at that time had a turnover of five ATR 72-500 aircraft in the air service equivalent to this amount. In 2021, the company had a turnover of 1 billion 396 million rupees.

In 2020, the company had a turnover of 2.66 billion rupees, 3.43 billion rupees in 2019 and 3.135 billion rupees in 2018. Angchiring died in February 2075. After his death, Yeti’s business has continued to decline. However, the covid-19 epidemic also started in the meantime. Even after the end of the epidemic, there was some improvement in the air service business, but the business of Yeti could not return to its old rhythm.

According to Credit Rating Icra Nepal, two years ago Yeti’s share in the air market was 25 percent. Since then, the data has not been made public.

Airlines are getting saddled with debt. Yet airlines have run into trouble due to declining business and the burden of rising interest rates. Banks are also urging him to reduce his debt. In the co-financing of half a dozen banks, he has a debt of around 6 billion rupees. Apart from this, the group has also taken loans from different banks for various projects.The business of Yeti Airlines is continuously declining after the accident of ATR aircraft with a capacity of 72 seats in Pokhara last January.

The accident affected the overall air service business of Yeti.Business has not yet returned to normal. The financial data of the company shows that there is a decrease in the business of other planes. The group also talked to the banks for the divestment of the shares of these airlines. Some businessmen close to Sonam, the owner of Yeti, also talked to potential buyers. But after the talks with the banks did not work out, in the end it was partnered with Asian Life.