NOC eyes capital structure change
KATHMANDU:
Ministry of Commerce and Supplies is planning to change the current capital structure of Nepal Oil Corporation that is expected to give highly indebted state oil monopoly a relief.
“The ministry is planning to convert government’s loans into shares,” a ministry source said, adding that Finance Ministry is, however, not enthusiastic about it. “Converting loan into share is in practice,” joint secretary at the Finance Ministry Mahendra Man Gurung said, adding that but it is not a good practice.
The government can get dividend by converting loan into shares, if the company goes into profit but chances of NOC making profit is slim since it has been into a loss-trap, he said, adding that Nepal Oil Corporation, however, might benefit from the decision as it will be freed of financial burden of paying interest.
A committee – led by joint-secretary of Finance Ministry Rajeev Gautam – has been formed to carry out study of changing capital structure alongwith Article of Association, Ministry of Commerce and Supplies spokesperson Ganesh Prasad Dhakal said. Representatives from Ministry of Law and Justice, Company Registrar Office and Office of Comptroller General are also in the team.
The government owns around 98 per cent of NOC share and rest is of four other state owned enterprises — Rastriya Beema Sans-than, National Trading Ltd, Nepal Bank and Rastriya Banijya Bank, according to NOC spokesperson Mukunda Prasad Dhungel. The NOC was established on January 10, 1970 with a total of Rs 96.7 million initial paid-up capital.
Source: THT
Ministry of Commerce and Supplies is planning to change the current capital structure of Nepal Oil Corporation that is expected to give highly indebted state oil monopoly a relief.
“The ministry is planning to convert government’s loans into shares,” a ministry source said, adding that Finance Ministry is, however, not enthusiastic about it. “Converting loan into share is in practice,” joint secretary at the Finance Ministry Mahendra Man Gurung said, adding that but it is not a good practice.
The government can get dividend by converting loan into shares, if the company goes into profit but chances of NOC making profit is slim since it has been into a loss-trap, he said, adding that Nepal Oil Corporation, however, might benefit from the decision as it will be freed of financial burden of paying interest.
A committee – led by joint-secretary of Finance Ministry Rajeev Gautam – has been formed to carry out study of changing capital structure alongwith Article of Association, Ministry of Commerce and Supplies spokesperson Ganesh Prasad Dhakal said. Representatives from Ministry of Law and Justice, Company Registrar Office and Office of Comptroller General are also in the team.
The government owns around 98 per cent of NOC share and rest is of four other state owned enterprises — Rastriya Beema Sans-than, National Trading Ltd, Nepal Bank and Rastriya Banijya Bank, according to NOC spokesperson Mukunda Prasad Dhungel. The NOC was established on January 10, 1970 with a total of Rs 96.7 million initial paid-up capital.
Source: THT
