SEBON Postpones HIDCL Auction Amidst Confusion; Here's What Each Party Says

Hydroelectricity Investment and Development Company Limited (HIDCL) has postponed the auction of its promoter right shares on SEBON's instruction.

The company had been auctioning its promoter right shares from Falgun 01. The auction was supposed to conclude on coming Sunday, i.e. Falgun 15, 2078.

Earlier, the company concluded the 1:1 ratio right shares issue on Bhadra 08, 2078. 11,00,00,000 units right shares were issued from 5th Shrawan. The hydropower company declared the book closure date for its rights offering on Jestha 28, 2078. Thus, investors maintained before that day were eligible to apply for the shares.

3,30,00,000 promoter right shares were unclaimed by eligible promoters. Thus, the same shares were now being auctioned. Note that the other 7,70,00,000 shares have already been listed in NEPSE.

Rs. 100 was the minimum bid rate for 3,30,00,000 promoter shares. The minimum bid quantity was 100 unit shares. Individuals, institutions, and companies were all eligible to bid for the auction. Global IME Capital had been appointed the auction manager.

It was confusing as to whether the shares will trade as promoter shares or ordinary shares. Sharesansar covered a detailed report regarding the issue in this article:

HIDCL Promoter Shares Auction: Will They Trade At Ordinary Share Price?

On-call with Sharesansar, SEBON's Deputy Executive Director and Information Officer Deepa Dahal read the regulator's letter to the auction manager. The letter has asked the company to clarify whether the company is expecting to have it listed as ordinary shares or promoter shares. Because of the prevailing confusion among investors and bidders, the regulator sent the postponement order so the company can submit its clarification for all stakeholders.

Note that the regulator hasn't instructed them to follow a particular path for now, and has only asked for clarification.

The issue manager Global IME Capital redirected Sharesansar to the company for more information. A representative stated that they can only act as mediary between the company and SEBON to relay the information that HIDCL forwards.

HIDCL'S Company Secretary Jiban Basnet then informed Sharesansar that the company will submit a letter to the board on Sunday. He highlighted his previous statement that HIDCL's existing promoter shares have been listed under the HIDCL tag from the beginning. Thus, Basnet was unable to exactly ascertain what will happen to the shares. He mentioned that the company's reply will only reveal the company's intention to follow the rules that will be set forth.

Basnet also clarified that the regulator has the final say on whether it will let the auction resume soon. If the auction can be concluded in a few days or weeks, it will pose no problem to bidders who have already deposited the bid amount. If the process becomes lengthy in time, the regulator and the company will have to cooperate on whether to refund the bidders their investment.