Prabhu Bank takes over Nepal Development Bank

ShareSansar, March 18:

Prabhu Bank Limited (PRVU) has acquired Nepal Development Bank Limited that was under the process of liquidation.

In an interview with Sharesansar a few weeks ago, Prabhu’s CEO Ashok Serchan had said that despite claims that Prabhu was taking risk by buying failing companies, the bank would push ahead with more mergers and acquisitions in future as part of its strategy to grow. He had attributed Prabhu’s move to the bank’s ability to see possibilities where others only saw risks.   

Under the acquisition, agreement six shares of Nepal Development Bank would be equivalent to one share of Prabhu. In order to get the shares, shareholders of Nepal Bank will meet the fit and proper test standard. Promoters who do not meet the standard and shareholders who want cash instead of shares will get Rs 30 per share.

Now the depositors of Nepal Bank can withdraw the money from Prabhu Bank Limited and the loans floated by Nepal bank will now be recovered by Prabhu Bank.

In order to buy out Nepal Bank, Prabhu had signed an agreement with a liquidator on Magh 11. Nepal Rastra Bank had given its nod to the acquisition deal on Falgun 6. The final deal was long overdue as the process was delayed pending court verdict on some outstanding issues. Appellate Court Patan issued a verdict on the matter on Falgun 25, paving the way for the acquisition.