Of five grameen banks entering merger, shares of two fixed at Rs 1

ShareSansar, June 21:

Among the five rural banks that are set to merge with each other, shares of two have been fixed at Rs 1 per unit. The five banks, Purwanchal, Madhyamanchal, Madhya Paschimanchal, Paschimanchal, Sudur Paschimanchal, had formally agreed to merge last year.

The price of Sudur Paschimanchal’s shares has been fixed at Rs 1.02 and that of Purwanchal at Rs 1.40. The shares, initially priced at Rs 100, were greatly depreciated after the due diligence audit (DDA). As per the DDA, the new bank’s 1 share would be equivalent to Sudur Paschimanchal’s 98 shares and Purwanchal’s 71.40 shares.

Bad loans and dearth of good assets have been blamed for the decline in value of the shares.

The highest value has been assigned to the shares of Paschimanchal Grameen Bikas Bank at Rs 140 per share. Likewise, the price of Madhya Paschimanchal has been fixed at Rs 77.78 and that of Madhyamanchal at Rs 50.

With the completion of the due diligence audit (DDA) that fixed the share swap ratio, the banks now plan to begin other legal process to complete the merger by mid-August.

After the merger, the new bank would be called Grameen Bikas Bank Nepal.

Among the five banks, Madhyamanchal boasts of the highest paid up capital of Rs 10 crore. Likewise, the paid up capitals of Purwanchal stands at Rs 6 crore, Sudur Pashimanchal at Rs 5 crore 58 lakh, Paschimanchal 6 crore 60 lakh, Madhya Paschimanchal 7 crore 35 lakh and Madhyamanchal 10 crore.