Friday, July 12, 2013

Nepal Bank’s rights issue collection at Rs 3 arba 33 crore, 8% short of target

The rights shares issued by Nepal Bank has fallen 8 percent short of being fully subscribed as the money collected by the end of closing day accounted only for 92 percent of the total issue.

As per the press statement sent by the bank, it will sell the remaining shares following the due legal process.

The bank got Rs 1 arba 40 crore worth of applications for the rights shares from the government alone, which has 38.6 percent stake in the bank.

Likewise, it collected Rs 1 arba 93 crore from other shareholders such as the bank’s employees, business houses and minority shareholders who own 61.4 percent stake in the bank. 

The total collection from this rights issue stands at Rs 3 arba 33 crore, says the press statement.

The paid up capital of the bank has reached Rs 3 arba 71 crore, up from Rs 38 crore before the issue. After the sale of the remaining shares, the paid up capital will reach 4 arba.

The bank had floated a total of 36,193,174 unit’s rights shares with the ratio of 1:9.5 on May 23. The date for the closure of the rights shares was set for June 26 but was extended by 15 days after the shares were not fully subscribed.
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As published by THT,

 The rights issue of Nepal Bank Ltd (NBL) got successfully subscribed following a two week extension.

NBL, that had launched its rights issue on May 23 for shareholders, was supposed to be closed by June 26.

However, the bank and rights issue managers postponed the closure date to July 11, as subscription fell short by a little less than half a million rupees.

The issue worth Rs 3.61 billion, managed by Citizens Investment Trust and Civil Capital, offered 36.1 million units of rights shares at 1:9.5 ratio with a face value of Rs 100 to existing shareholders to increase the bank's paid up capital and make its net worth positive. Shareholders of the bank were supposed to subscribe 9.5 unit shares for each unit of share they own.

"We have raised the required amount and the shares will be distributed in the next 30 days as per regulation," pointed out CEO of Civil Capital Bhishma Raj Chalise.

The issue got extended as the Cabinet meeting needed to okay the decision for the government to purchase some 5000 unit shares, amounting to Rs 4.75 million, that were not subscribed by the staff. Of the 71,928 unit shares transferred to the bank's employees, some employees did not subscribe the shares, so the government will now pay for those 5000 rights shares.

The government that owns 38.6 per cent stake in the bank had already deposited Rs 1.39 billion to buy the rights shares. Following the rights share issue of Rs 3.61 billion, NBL's paid up capital will reach Rs four billion and make its net worth positive.

 

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