Tuesday, October 12, 2010

Chilime floats primary shares to Rasuwa locals

Chilime Hydropower Company is floating 960,000-unit of ordinary shares to the locals of Rasuwa district -- where the company is located -- from November 10 to December 14.
"After the issue to the locals, the company will float shares for the general public," said Prakash Man Shrestha, manager at the Chilime Hydro.
The Rasuwa-locals can apply for up to a maximum of 200-unit and minimum of 10-unit share. Of 960,000-unit of the shares separated for the locals, 636,000-unit will be for the locals of the project-affected Goljung, Chilime and Syafru Village Development Committees (VDCs), while the remaining 624,000-unit is for the locals of 15 other VDCs of Rasuwa district. The locals of three VDCs of project-affected areas will get the shares at a face value of Rs 100 per unit but others in the district and general public will have to pay Rs 324 per unit, after adding Rs 224 premium at the face value of Rs 100 per unit.
A company that has been regiatering profits for last three consecutive years can add premium at the face value of its shares. Chilime has not only been posting profits but also distributing cash dividends to its sharesholders since last five consecutive years.
The first domestic hydropower company that has been constructed with domestic capital and technical know--how had issued shares to the employees of Nepal Electricity Authority (NEA) as it was NEA's brain child. The company's shares are being traded above Rs 900 per unit currently. The Chilime model is being followed by the Upper Tamakoshi hydropower.
Claiming that they have right to the ownership in the company that is operating in their disctrict, the locals have formed a share struggle committee and filed cases at theSupreme Court for their right to be the shareholders of the company.
According to the amended Securities Registration and Issuance Regulation – 2065, hydropower companies must float shares for the locals before they open the issue for general public. A company has to float a minimum of 30 per cent shares to the public and out of the 30 per cent, five per cent has to be separated to the company’s staff; 10 per cent to the locals and remaining 15 per cent will be floated to the general public, the amended regulation said. "However, the locals share has a lock-in period of three years."
Thus the locals of Rasuwa districts cannnot sell the Chilime Hydropower shares within three years.
Securities Board of Nepal (Sebon) has amended the regulation to encourage the local participation in the hydro projects. The hydropower companies require a longer construction periods but they can float the shares to the public even during the construction phase provided it has obtained operating licence, and completion of one year’s audit and AGM.
Currently, there are only four listed hydropower companies -- National Hydropower, Butwal Hydropower, Chilime Hydropower and Arun Valley Hydropower -- at the Nepal Stock Exchange (Nepse).

The Company
KATHMANDU: Chilime Hydropower Company Ltd (CHPCL) is a subsidiary company of Nepal Electricity Authority (NEA). It was established in 1996 with the objective of promoting the utilisation of resources within the country for the development of hydropower. Its plant -- with installed capacity of 22.1 MW and located at Rasuwa district -- was built and commissioned by the company on August 25, 2003. In 2008-09, the project had started successsful in delivering 103.3 per cent of the contract energy to NEA. CHPCL is now executing four more hydroelectric projects and thwo of them -- Upper Sanjen Hydroelectric Project (11 MW) and Sanjen Hydroelectric Project (35 MW) construction will be started soon.

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