Asian Life Insurance Secures 49% Stake in Yeti Airlines, Paving the Way for Anticipated IPO
In a significant move, Asian Life Insurance, a prominent Nepalese insurance company, has successfully acquired a substantial 49% stake in Yeti Airlines, a leading aviation player based in Kathmandu. The transaction, valued at NPR1.75 billion Nepalese rupees (USD13.2 million), marks a strategic investment ahead of Yeti Airlines’ expected Initial Public Offering (IPO) on the Nepal Stock Exchange (NEPSE).
Reported by the Nepali-language Bizness News outlet and independently verified by ch-aviation, the acquisition sees Asian Life Insurance paying a noteworthy 70% premium for the shares previously held by the Sherpa family. Notably, the Sherpas, who founded Yeti Airlines in 1998, are actively promoting the upcoming IPO, signaling a pivotal shift in ownership.
The Sherpa family, known for their extensive business interests in the tourism and hospitality sectors, had a paper value of NPR100 (USD0.75) on their shares, which Asian Life Insurance purchased. With this acquisition, Asian Life Insurance will assume the day-to-day operations of Yeti Airlines, with Subhas Sapkota taking on the role of the airline’s new Chief Executive Officer.
Yeti Airlines, which currently operates flights to 12 destinations within Nepal, has historically faced profitability challenges. However, it has been sustained through cross-subsidization by the Sherpa family’s diverse business portfolio, including trekking enterprises, hotels, and acting as general sales agents for prominent airlines such as Thai Lion Air, Malindo Air, and Kuwait Airways.
The move comes following the unfortunate demise of Angchiring Sherpa in a helicopter accident in February 2019. Now led by Lakpa Sonam Sherpa, the Sherpa family is eager to divest from the loss-making airline and actively supports the impending IPO.
Established in 2008, Asian Life Insurance, under the leadership of CEO Dinesh Lal Shrestha, brings a wealth of experience from the banking and life insurance sectors. With authorized capital of NPR5 billion (USD37.7 billion) and a paid-up capital of (USD21.8 million), the insurance company manages life insurance funds totaling NPR34 billion (USD356.1 million). Furthermore, Asian Life Insurance is poised to oversee the IPO process, slated to take place within 12 months, pending regulatory approvals. This strategic acquisition sets the stage for a new chapter in Yeti Airlines’ journey, with Asian Life Insurance steering its course towards future growth and financial success.