Chhyangdi Hydropower (CHL) Issuing 10: 3 Rights Offering From Magh 11: What's the Issuer Rating and Objective of Issuance?

Chhyangdi Hydropower Limited (CHL) is issuing its 10:3 ratio rights offering from 11th Magh to 2nd Falgun, 2078.

A total of 8,93,025 shares will be issued to eligible shareholders at a par value of Rs. 100 per unit, which will raise a total capital of Rs. 8,93,02,500 for the company.

Poush 21 was the book closure date for the rights offering. Thus, shareholders maintained before that day can apply for the right shares when the company opens the issue.

The paid-up capital of the company after 30% rights issuance will be Rs. 38,69,77,500. Global IME Capital has been appointed the issue manager.

ICRA Nepal has given the issuer rating of BB to the company, denoting moderate risk of default regarding timely servicing of financial obligations.

The right shares will be issued in order to raise the capital structure of the company as planned. The proceeds of the rights offering will be used to fund the 4Mw Upper Chhandi Khola Small Hydropower Project.

The 4Mw Upper Chhandi Khola Small Hydropower Project is a Run-of-River type hydroelectricity generation scheme with an installed capacity of 4.0 MW. According to the company's website, the project is aimed at the generation of 22.05 GWh average annual energy before 5% outage using design discharge of 0.67m3/s at Q40 off Chhandi Khola (a tributary of Dordi River) and net head of 712.15 m.

Note that the company has already proposed yet another 40% rights offering (yet to be approved by SEBON) on the paid-up capital maintained after 30% rights adjustment. After adjustment of the 30% right shares, the 40% right shares will be issued on this capital, finally bringing the paid-up capital to Rs. 54,17,68,500.

As of writing, CHL has an LTP of Rs. 417.80.

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