Relisting of NBL shares on Nepse after Tihar

KATHMANDU, NOV 11 -

The Nepal Stock Exchange (Nepse) has said the relisting of Nepal Bank Limited (NBL) shares on the secondary market will take place right after Tihar. NBL has sent a letter to Nepse, requesting for share relisting. The bank has a paid-up capital of Rs 380 million with shareholders representing the government, private sector and employees.

The Ministry of Finance has also recommended for the relisting and a Nepal Rastra Bank (NRB) official said the central bank would recommend for the same before Tihar. Sebon had sought the authorities’ recommendation for relisting as NBL shares were de-listed eight years ago as per the request of the Finance Ministry and the central bank. “Re-listing of NBL shares will occur after Tihar,” said a senior Nepse official.

NBL management team’s coordinator Maheswor Lal Shrestha said the bank has paid necessary fees for its relisting on Nepse.

As the NBL is implementing its recapitalisation plan, it is necessary to relist its shares on Nepse to enable it to issue rights shares. By issuing rights shares, Nepal’s oldest bank seeks to increase its paid up capital to Rs 4 billion.

As per the recapitalisation plan, the government has already injected Rs 1.39 billion from its part as a major shareholder. The bank plans to raise Rs 3.62 billion through the 1:9.5 rights issue, which will increase its paid-up capital to Rs 4 billion. Although the NBL has not gone through a formal initial public offering (IPO), all its shares will be listed as ordinary shares. It is because they were traded as ordinary shares before they were delisted. Usually, the market value of ordinary shares remains much higher than that of promoter shares in the Nepali stock market. “They were ordinary shares as per the law when they registered,” said NRB Spokesperson Bhaskar Mani Gnawali. NBL said it has prepared necessary documents, including the prospectus, and has also appointed the issue manager and share registrar. The bank has appointed Civil Merchant Bank as share registrar and Citizens Investment Trust as issue manager.

The employees were recently provided about 5 percent shares of the bank through the over-the-counter (OTC) market. They had subscribed to 71,929 shares worth Rs 7.19 million and they will also have to put money while the bank issues rights shares.

As increasing its paid-up capital to Rs 4 billion will not be enough to turn its negative net worth to positive and to meet its capital adequacy ratio as prescribed by NRB, NBL has also taken an initiative to sell some of its fixed assets in eight places, whose distressed value has been maintained at Rs 2 billon.

Source: The Kathmandu Post