Nepal Bank is floating its rights shares from May 23.
The bank is issuing 36.1 million units of rights shares at 1:9.5 ratio with a face value of Rs 100 to existing shareholders to increase the bank's paid up capital and make its net worth positive.
The issue, managed by Citizens Investment Trust (CIT) and Civil Capital, will be open for subscription on May 23 to 26. Nepal Bank shareholders can apply for the rights shares from any of the branches of the bank, CIT and Civil Capital. Shareholders who have purchased the bank's shares till May 9 will be eligible to apply for the rights shares.
Following the rights share issue of Rs 3.61 billion, the bank's paid up capital will reach Rs 4 billion and make its net worth positive.
The government that owns 38.6 per cent stake in the bank has already deposited Rs 1.39 billion to buy the rights shares.
The rest of the shareholders include Nepal Bank employees, big corporate houses and minority shareholders, who own 61.4 per cent stake in the oldest commercial bank of the country.
Nepal Bank's shares were de-listed by Nepse in March 2004 as the bank was heading towards insolvency, yet the bank's share prices then were being traded at about Rs 175.The bank's 3.8 million unit shares were re-listed at Nepal Stock Exchange (Nepse) in December 2012 to make way for the rights issue. The shares are being traded at Rs 508 per unit following the free fall since the past one month. Investors who are not willing to subscribe the rights shares are dumping their shares after booking profit. The bank's shares debuted at Rs 256 at Nepse that reached Rs 1,295 in less than a month.
The central bank has been handling the bank until the second quarter of the next fiscal year.