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HNB Assurance will not be acquired by Stassens - Rienzie Wijetilleke

Hatton National Bank Managing Director/CEO Rienzie T. Wijetilleke yesterday denied speculation that its wholly owned subsidiary HNB Assurance was to be acquired by the Stassens Group which purchased the majority stakes of Sri Lanka Insurance Corporation Ltd.

Wijetilleke was responding to a question in this direction at a news conference held for the announcement of the Rs. 125 million HNB Assurance Initial Public Offer at the HNB Towers at Darley Road.

The HNB Managing Director who is also a Board member of HNB Assurance was asked whether there was such a proposed merger in the light of the synergies being spoken of in the Insurance industry.

He said:" There is no such move. SLICL are the giants in the business compared to us but we will make use of the branch network to expand our insurance businesses and we will grow independently, he said.

The HNB Assurance public share issue will open on November 4 where 10 million Ordinary Shares will be offered at Rs. 12.50 ( Premium of Rs. 2.50) inviting Rs. 125 million which will set off some of the advances which has been taken from the parent company while broadbasing the ownership of the company.

The share issue will come on the second board of the Colombo Stock Exchange as it does not have the three year track record of profits, which is a mandatory requirement for a first board listing, Executive Director Cyril Benjamin said.

The issue will be closed on November 21 or on the date that it is fully oversubsribed. After the Initial Public Offering, the parent company will have a 60 percent stake of its insurance subsidiary.

Wijetilleke said that this issue will test the insurance market and the retail investors' response to it as there has not been such an opportunity before.

The company is well poised to grow from the 2 percent market share it has today and the company will be using the Hatton National Bank branch network to promote the business.

The company is very confident that the insurance market in the rural areas which has untapped potential as the overall insurance penetration is a mere 9 percent. HNB Chairman Chrisantha Cooray said.

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