To divest cross holding, RBB to auction NIBL and Nepal Housing promoter shares

ShareSansar, December 12:

To comply with the central bank’s directive to all the BFIs give up cross holdings, Rastriya Banijya Bank Limited has called a tender to divest 56.52 lakh units of promoter shares of Nepal Investment Bank Limited and 1.96 lakh units of promoter shares of Nepal Housing Finance Company Limited.

Issuing a tender notice, the state-run commercial bank has, however, stated that only the institutional buyers as specified in the recently amended directive of Nepal Rastra Bank can apply for the auction of these shares by 2:00 PM on January 14, 2014.

The interested buyers must bid a minimum of Rs 594 per unit share of Nepal Investment Bank and Rs 101 for Nepal Housing, and they must apply separately for the promoter shares of the two companies.

They must also submit 10 percent of the bid amount as a security while bidding for the auction.

The bid will be opened on the same day at 4:00 PM, if there is no public holiday on that day.

It may be noted here that the recent central bank directive has included only state-own organizations such as Nepal Telecom, Employees Provident Fund, Citizen Investment Trust, Rastriya Beema Sansthan, Nepal Army, Nepal Police and Armed Police Force as institutional buyers.

Earlier this year, NIDC Development Bank Limited had held an auction of 12.35 lakh units of promoter shares of Nabil Bank Limited to divest the cross holding.

It may also be noted that 80 percent of the shares of NIBL are promoter shares while only 20 percent is held by the ordinary shareholders.

Of the 80 percent promoter shares, a group of companies hold 50 percent while Rastriya Banijya Bank holds 15 percent, which it is now divesting, and Rastriya Beema Sansathan also holds 15 percent.