Pashchimanchal’s AGM finally endorses merger deal; its per unit share priced at Rs 290

ShareSansar, April 15:

The state-run Pashchimanchal Grameen Bikas Bank Limited has finally endorsed a special  proposal merger with other four regional rural development banks.

The much-awaited merger proposal was endorsed by the 19^th AGM held on Friday after the disgruntled women shareholders of the bank finally agreed to the plan after they were assured of a good swap ratio, according to Chief Executive Officer Dharma Raj Pandey.

They were opposing the merger since only Pashchimanchal was in profit while the rest are in loss.
 

The AGM held in Butwal paved the way for the finalization of the merger by endorsing the special proposal and the Due Diligence Audit (DDA) Report to that effect.

Now, once the central bank gives the final approval of the merger, the merged entity to be named 'Grameen Bikas Bank' will have an impressive network of 182 branches, five regional offices and a central head office.

The authorized capital of these banks stands at Rs 1 arba, and the paid-up capital at Rs 40.7 crore.

Pandey told the AGM that the merged bank will shortly float an FPO and seek additional grant from the government to raise the paid-up to Rs 65.5 crore.

But sources privy of the development tell ShareSansar that since the government is planning to give Rs 50 crore grant to the merged entity, it might as well issue bonus or right shares to shore up its paid-up.

Now, once the central bank gives the final approval of the merger, the merged entity will have an impressive network of 182 branches, five regional offices and a central head office.

The annual event also duly approved 15 percent of the paid-up capital as cash dividend and another 15 percent as bonus shares to the shareholders from the net profit it posted in the last fiscal year 2069/70.

The DDA for the merger of the five state-run regional development banks held back in May last year had ascertained the swap ratio between 0.77 to 2.75 as per which Paschimanchal’s ratio will be 2.75 while that of Madhyamanchal will be 0.77 and the rest will have 1.

 “After calculating the dividend, Paschimanchal’s shareholders will get 2.9 times or the per unit share will be priced Rs 290,” said a source privy of the development.

The merger initiated by the central bank to make a strong national level development bank to serve the poor could be completed by the end of this fiscal year, according to the head of the merger committee Jagat Pokharel.

The five grameen bikas banks had signed a MoU for the merger back on October 11, 2012.