Tuesday, April 2, 2013

RMDC to float primary shares at premium

Rural Microfinance Development Centre (RMDC) is going to be the third company — after Chilime Hydro and Nepal Telecom — and the first financial institution to issue primary shares at a premium.
"RMDC has asked Securities Board of Nepal for the final approval to issue 1,560,000 units of primary shares at a face value of Rs 100, with a premium of Rs 80, making it a total of Rs 180 per unit," said chief executive of RMDC Shankar Man Shrestha.
RMDC, the wholesale lender for microfinance institutions, had sold 300,000 units of shares worth Rs 30 million face value at Rs 180 per unit to International Finance Corporation (IFC) — a private sector lending window of the World Bank Group — recently. "IFC paid Rs 54 million in total," he said, adding that Siddhartha Bank had also bought 140,000 unit shares at a premium at various rates of up to Rs 315 per unit. "Siddhartha Bank paid Rs 39.48 million in total."
The class 'D' financial institution, with a paid capital of Rs 364 million, had a net worth of Rs 1.15 billion by the end of the second quarter of the current fiscal year. The net worth is projected to increase to Rs 1.60 billion by the end of the current fiscal year.
RMDC — that has 117 microfinance institutions as its partner institutions across the country serving one-fourth of the total population — was initially promoted by Nepal Rastra Bank and 13 other commercial banks.
According to the current share holding, Standard Chartered Bank Nepal holds 14.33 per cent, Nabil Bank holds 13.93 per cent, Himalayan Bank 13 per cent, Nepal Investment Bank nine per cent and Nepal Bank holds eight per cent, after the entry of IFC that holds 8.2 per cent shares.
Nepal Rastra Bank's share has also come down to five per cent from the initial 25 per cent. After the public issue, their current share holding per cent will further reduce.
"RMDC posted a net profit of Rs 136.5 million in the last fiscal year 2011-12," said Shrestha, adding that a fiscal year back in 2010-11, it had posted Rs 124.8 million net profit, whereas in 2009-10, it had recorded a net profit of Rs 89.2 million.
After the public issue, RMDC will have a paid capital of Rs 520 million. It has appointed Ace Capital as its issue and sales manager for the primary issue.

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