Kathmandu. ICRA Nepal has downgraded the rating of Nepal Reinsurance Company (Nepal Re) to ‘Nepal Re’ rating. ICRA Nepal has downgraded the Nepal Ricoh Issue rating to ‘ICRANP IRA A minus’. Earlier, the company’s rating was ‘ICRANP IRA A’.
ICRA has cited the devastating floods in the Bhotekoshi River on August 26 as a major factor in the Nepal RICO rating. The devastating floods have damaged about 700 MW of hydropower projects in the riverine areas, ICRA said in a statement. “Private and commercial property has been severely damaged along with vehicles awaiting customs clearance,” the statement said.
ICRA expects that due to the damage caused by these floods, the claims of Nepal REEMA will increase. “With the increase in claims, the liability of Nepal REEMA will also increase,” ICRA said.
ICRA said that the net worth of Nepal RICO has decreased due to claims related to the riots of August last year. “The final data on the damage claims of the recent Bhotekoshi floods will determine the impact on the company’s financial position and liquidity,” ICRA said.
Similarly, ICRA has also continued its ‘Watch with Negative Impact’.
Nepal Ricoh, which has a large share of the Government of Nepal, has a paid-up capital of about Rs 13.42 billion and a net worth of Rs 20.52 billion. The government owns about 44 percent of the company, about 27 percent of the non-life insurance companies, about 6 percent of the life insurance companies, about 7 percent of the public companies and about 16 percent of the general public.
