Sunday, September 15, 2013

Nepal Bank to auction 2.49 million unsubscribed right share

Nepal Bank is planning to auction some 2.49 million units of unsubscribed right share to the public.
The oldest bank in the country has called for sealed quotations from interested investors on September 16-24 as the rights shares did not find the enough buyers as expected.
An investor can bid for a minimum of 10 units at a price higher than Rs 100 per unit to the issue manager Civil Capital, according to the bank that will allot the auctioned shares as ordinary shares based on highest quoted price on the next day of closing.
Nepal Bank had floated 1:9.5 rights issue of 36.1 million units on May 23-July 11 to increase the paid up capital to Rs 4 billion. The issue that was supposed to close on June 26 extended the closure date to July 11 due to insufficient subscription. Within the extended time period the shareholders subscribed 33.6 million units – out of 36.1 million units – only.
Currently, Nepal Bank has a paid up capital of Rs 3.7 billion.
Earlier, Nepal Stock Exchange (Nepse) de-listed Nepal Bank’s shares in March 2004 due to the bank’s poor performance and donor-funded restructuring and reform programme.
Nepal Bank re-listed its shares in December 2012 after the central bank permitted to increase its paid capital by issuing rights shares. Its shares are currently being traded at around Rs 160 at Nepse.
The bank’s Earning Per Share (EPS) stands at Rs 208.08 but its net worth is still negative, according to its fourth quarter report of the bank that has 38.6 per cent government stake, while the rest is owned by the general public, different companies and the bank’s employees.

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