Nepal Bank’s right share auction oversubscribed

Nepal Bank Ltd (NBL)’s right share auction of unsold units got oversubscribed by over three-and-a-half times.

The oldest bank of the country received some 1,111 application bids for the unsubscribed 2.49 million units of right shares, according to the bank that had asked for sealed quotations from prospective investors on September 16-24.

The bidders had asked for over 8.93 million unit shares at a price ranging from Rs 135 to Rs 180 in a sealed tender document.

The bank had issued its right share for 36.1 million units at 1:9.5 ratio on May 23-July 11 but its shareholders were not very much enthusiastic making the bank extend the application deadline to July 11. Despite the extension of the right issue deadline, shareholders only subscribed 33.6 million units making a short fell short by less than half a million.
The investors of the sealed bid will be allotted shares on September 30, according to Nepal Bank that is witnessing its shares being traded at around Rs 160 at Nepal Stock Exchange (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 financials.

But the bank that has 38.6 per cent of government stake is planning to bounce back to positive networth after it will have Rs 4 billion paid capital following the right share, it added. The central bank permitted the oldest bank to raise paid up capital to Rs 4 billion to make the bank financially sound.