Machhapuchchhre Bank cancels its merger with Janata Bank; 17th AGM on Baisakh 26 to endorse 16% bonus & 50% right share

Machhapuchchhre Bank Limited (MBL) has canceled the ongoing merger process with Janata Bank Nepal Limited (JBNL).  The ban on trading in NEPSE is expected to be lifted very soon. NEPSE had halted both companies trading from September 9, 2015. According to an official source, “the reason behind the cancellation of the merger was due to the disagreement of swap ratio.” Earlier, the swap ratio for the merger was finalized at 121:82. The dispute of bonus share issue lead to disagreement in share swap ratio. As per DDA report Machhapuchchhre and Janata Bank share price was fixed at Rs 109 and Rs 82 respectively. The price evaluation of Machhapuchhre was Rs 100 whereas Janata bank price evaluation was Rs 75. Adjusted price Rs 82 after DDA was not approved by Janata Bank. The cancelation notice of merger process of Machhapuchhre and Janata Bank has been sent to Nepal Stock Exchange, Sebon and concerned authorities. Meanwhile, Machhapuchchhre Bank will be convening its 17^th Annual General Meeting (AGM) on Baisakh 26, 2073. The AGM will be held at Hotel Pokhara Grand, Pardi, Pokhara, Kaski at 11:00 AM. Main agendas of the AGM are:

• To endorse 16 percent bonus shares and 0.84 percent cash dividend for tax purpose from the net profit it earned from the fiscal year 2071/72.
• To endorse 2:1(50%) right share after bonus share is issued.
• To increase authorized capital up to Rs 10 arba and paid up capital will increase after bonus and right share is issued.
• Authorize BOD to initiate merger and acquisition process by endorsing Due Diligence Audit (DDA) and memorandum of Understanding (MOU).
• Conversion of promoter – public shareholder structure to 51% promoter shares and 49% ordinary shares from existing 66.56:15.56. After the conversion, the promoter share to ordinary share ratio of the bank will stand at 51:49 percent.
• To endorse help provided to earthquake victim of Rs 32.49 lakh as a part of corporate social responsibility (CSR).
• To increase meeting allowance of BOD members.
• To shift the head office of the bank from Pokhara Submetropolitan City, ward no:9 to Kathmandu Metropolitan City, Ward no-2, Lazimpat.
• To amend article of association and memorandum of association as per directed by registrar officer or Nepal Rastra Bank.

Other main agendas of the AGM include financial highlights of 2071/72 and appointment of auditor. Only those shareholders owning shares till Baisakh 6 will be entitled to the dividend of the company. The register of their shareholders will remain close from Baisakh 7, 2073 till Baisakh 26, 2073 for the purpose of its upcoming AGM. Machhapuchchhre Bank has earned net profit of Rs 40.13 crore in the second quarter of the fiscal year 2072/73 as per unaudited report. It’s paid up capital stands at 3.30 arba and after the issuance of 16% bonus share the paid up capital will rise to Rs 3.82  arba.