Nepal Bank appoints CIT as issue manager

Nepal Bank Ltd (NBL) has appointed Citizen Investment Trust (CIT) as its issue manager for its rights issue.

Coordinator of Nepal Bank management team Maheshwor Lal Shrestha and managing director of CIT Rishi Ram Gautam signed the agreement on behalf of their respective institutions today. CIT will manage the rights issue of Nepal Bank worth Rs 3.6 billion.

To increase the bank's paid up capital, Nepal Bank is issuing 36.1 million units of rights shares at a ratio of 1:9.5 with a face value of Rs 100 to existing shareholders. Shareholders can subscribe for 9.5 unit shares for each unit of share they own.

The bank's share was re-listed at Nepal Stock Exchange (Nepse) this week to make way for the rights issue. Its 3.8 million units of shares have been listed and will be available for trading from Sunday.

The bank’s paid up capital stands at Rs 1.7 billion as the government – that owns 41 per cent stake in the bank – has already injected Rs 1.37 billion for rights shares. The bank is planning to announce the rights issue before the end of the second quarter.

Nepal Bank's shares were de-listed by Nepse in March 2004 as the bank was heading towards insolvency. Yet, its shares were being traded at near Rs 175 just before it was de-listed. Though the bank's performance has improved after going through a decade-long restructuring programme, its net worth is still negative by around Rs 2.6 billion.