KATHMANDU, March 16:
The Hydroelectricity Investment and Development Company Limited (HIDCL) has proposed to distribute 5 percent cash dividend to its shareholders form the earnings it made over the past two and half years.
The company made interest income of Rs 773.7 million during the period from the amount deposited in 19 commercial banks till the end of fiscal year 2012/13.
It plans to endorse the dividend distribution by holding second annual general meeting on April 4.
Banks have offered interest rate of as high as 11 percent for HIDCL, according to the company officials.
Energy secretary Bishwa Prakash Pandit, who is also the chairman of HIDCL, said they decided to distribute dividend as the company made good profit in the last fiscal year. “We should not look how the money was earned. As the company has made profit, it is natural for the investors to expect dividend,” added Pandit.
Pandit said the company made investment pledge of Rs 2 billion after he came at the helm.
Deepak Rauniyar, CEO of HIDCL, said the company was preparing to distribute Rs 400 million, or 5 percent of the company´s paid-up capital.
The company has paid-up capital of Rs 8 billion.
“We earned Rs 355.2 million in 2011/12 and Rs 412.7 million in 2012/13,” he said, adding, “As we have made profit, we must distribute dividend. It shouldn´t be taken otherwise.”
Though the company has decided to distribute dividends, its laws says the company can divide profits after earning through investment in medium and large-scale hydropower projects and building transmission lines. HIDCL has yet to invest in any hydropower project. However, it has pledged to invest in five hydropower projects and to construct a stretch of cross border transmission line in Nepali side.
A high-level official at the Ministry of Energy (MoE) expressed dissatisfaction at the proposed dividend distribution. “HIDCL is not a financial institution to distribute dividend from interest income,” the official said, preferring anonymity.
The government has invested Rs 5 billion in the company. Likewise, Employees´ Provided Fund, Citizens Investment Trust and Rastriya Beema Sansthan have invested Rs 1 billion each in the company.
HIDCL is co-financing Mistri Khola (42 MW), Dordi (27 MW), Solu (23.5 MW), Khanikhola (30 MW) and Kabeli ´A´ (37.6 MW) together with different commercial banks.
The company still doesn´t have laws related to loan investment and recovery of debt. Officials of the company said huge amount of money has remained unused in the absence of those laws.
Source : Republica