Prime offers Bonus shares worth Rs 2.73 arab, Right worth Rs 1.24 arba; BOK may issue right shares worth Rs 5.04 arba

Capital Plan of Bank of Kathmandu Ltd

There are three possible means through which Bank of Kathmandu Ltd.(BOK) can meet the minimum capital requirement of NPR 8 billion within financial year 2073/74. They are as under:

1. By way of capitalizing portion of profits that will accrue during financial year 2071/72, 2072/73 and 2073/74 and call for additional capital by way of issue of Right Share.

           The basic shape of the plan is as given below:

         2. By way of Mergers and Acquisitions.

       3. By way of Foreign Joint Venture Partner/s (FJVP) or Foreign Investors (FI).

The above plans are not mutually exclusive. In other words, the Bank can also use combinations of some or all of them to meet its capital requirement.

Although the above options are available, the Bank will have to have a basic plan first so that it can remain compliant with the minimum capital requirement of NRB. For this purpose, it will adopt a plan of capitalizing maximum portion of free reserves that are likely to accrue up to financial year 2073/74. The gap will be met from fresh infusion. Besides this basic plan, it will also look for suitable partners/institutions to merge with or acquire some of them. Further, it also plans to remain open towards inviting foreign joint venture partner or foreign strategic investor.

Market share, return on investment, value addition etc. will be the primary tools to assess these consolidation or foreign investment plans.

CAPITAL PLAN OF PRIME COMMERCIAL BANK LTD