KATHMANDU, SEP 27 – The planned initial public offering (IPO) of 456MW Uppar Tamakoshi Hydropower Project has met with uncertainty, with Nepal Electricity Authority (NEA) staff filing case against the public share issuance.
NEA staff have sought more share in the project, which the biggest so far developed with domestic resources. They have been allocated 3.84 percent stake in the project.
It has been more than a year since the project applied with the Securities Board of Nepal (Sebon) for its approval of the IPO plan. The project has also appointed Citizen Investment Trust as issue manager.
According to Sebon, the company has submitted almost all the necessary documents, including the audit report. “However, we could not give the approval due to the court case,” said Sebon Spokesperson Niraj Giri. Demanding the proposed IPO be scrapped, the NEA staff filed a case in the Supreme Court about a month ago. They have also demanded their stake in the project be hiked to 24 percent from the current allocation of 3.84 percent. The NEA is the project’s developer. NEA Employees’ Union Secretary Bhumi Nanda Aryal said a faction of the employees are protesting against the share allocation. “They have been demanding they be allocated primary shares in line with the model of Chilime Hydropower Project,” he said.
In the first phase, UTKHPL plans to issue public shares to the local people and employees of NEA, Employment Provident Fund (EPF), Citizen Investment Trust (CIT) and Rastriya Beema Sansthan (RBS). As per the proposed allocation, 51 percent of shares has been earmarked for promoters, including 41 percent to NEA, 6 percent to Nepal Telecom and 2 percent each to CIT and RBS.
Under public shares allocation, 15 percent has been
separated for the general public, 10 percent for the local people, 17.2 percent for EPF members, 3.84 percent for NEA employees, and remaining 2.88 percent for the employees of EPF, Nepal Telecom, RBS and CIT.
The NEA staff have also expressed dissatisfaction over “such a huge proportion” of the IPO allocated to EPF employees. “As the number of EPF staffers is very low compared to NEA’s, the IPO will be more beneficial to EPF employees,” said Aryal.
EPF, which is the main financer of the project, has around 500 staff. This means each EPF employee will get more than 3,000 shares, according to Aryal. “The EPF employees will get a combined 1,524,960 units, which is 1.44 percent of the total primary shares,” he said. “This is quite unjust.”
The project is scheduled to complete by July 2016.
The construction of the tailrace tunnel, which discharges water from the power house of the project, was completed Thursday.
Source : eKantipur