Bank Asia sells its stake to IFIC Bank, exits from NBB

ShareSansar, January 27:

The Bangladesh-based Bank Asia has sold its 13.77 percent of the overall stake of Nepal Bangladesh Bank to International Finance Investment & Commerce Bank Ltd (IFIC), another Bangladeshi bank.

Following the transfer of 27.67 lakh units of shares, IFIC’s stake in NBB has risen to 38, according to NBB’s Chief Executive Officer Gyanendra Prasad Dhungana.

He informed that the shares were bought at a total cost of Rs 71.95 crore at the rate of Rs 260 per unit after  Nepal Rastra Bank approved the deal last week.

Though IFIC had held 50 percent of the stake in the past, it has later sold 15 percent of its stake to Bank Asia to increase its capital at that point.

Later it started to buy back the stake of NBB with an aim to increase its stake to 51 percent.

The blacklisting of NB group, the Nepali promoters of NBB, by Central Information Bureau after the appeal from Nabil Bank Ltd, the group members have come under heavy scrutiny from NRB. This action from the NRB has prompted the NB Group to sell its stake in NBB to IFIC to repay its loan in NBB and Nabil Bank.

As per a Due Diligence Audit (DDA), IFIC had agreed to buy the 3,846,600 units of promoter shares at Rs 260 from the NB Group and its members.

Along with it, IFIC agreed to buy 2,767,500 units of promoter shares from Bank Asia at the same price.  These deals will increase the IFIC current holding of 9.18 percent to around 42 percent, making the company highest stakeholder in NBB.

From the deal, the NB group has obtained Rs 988,892,840 which will be used to pay the outstanding debt of Rs 600 million in NBB taken by the NB group under the various individual names and companies. Similarly, the rest of the amount will also be used to pay the outstanding debt in Nabil Bank worth Rs 200 million.

Due to the sale restricting provision of the promoter shares for one year after resigning from the post of Board of Directors, the group still holds the stake which according to news will be sold after one year to IFIC Bank which will make their overall holding in the bank of 51 percent stake.