Rastra Bank provides LOI to Womi and Nagarik Microfinances' Merger and acquisition; 100% right of WOMI likely to be approved post merger

Tue, May 7, 2019 1:50 PM on Latest, Stock Market,

Nepal Rastra Bank (NRB) has provided the Letter of Intent (LOI) to the merger and acquisition between Womi Microfinance Bittiya Sanstha and Nagarik Laghubitta Bittiya Sanstha. WOMI is listed in Nepal Stock Exchange (NEPSE) whereas NAGARIK is a non-listed company.

At present, the paid up capital of WOMI is Rs 10.10 crore. Recently the company had endorsed to float 100% right share issue of Rs 10.10 crore worth from its SGM held on 6th Fagun, 2075.

NRB had halted the approval of right shares in order to push microfinance companies towards Merger and acquisition. Thus, since the companies have opted for M & A, NRB might now provide approval to the 100% right shares.

According to the 2nd quarterly report, Nagarik Laghubitta bittiya Sanstha (NAGARIK) has paid up capital worth Rs. 1.75 crore. The company has negative reserves worth Rs. 31.56 Lakhs. The Company has suffered a net loss of Rs. 49.64 Lakh.

After the completion of merger process, the combined paid up capital of the merged entity will be Rs 11.85 crore. This is the first time that any listed Microfinance company is going to merge with unlisted microfinance company.