KATHMANDU, Jan 5: After much hiccups, the highly-anticipated Upper Tamakoshi Hydropower Ltd (UTKHPL) has finally received approval to issue public shares to locals of the project affected district and its lending institutions.
Niraj Giri, spokesperson of Sebon, told Republica that the capital market regulator has given final approval to the UTKHPL to issue 34 percent of its shares. The IPO of the UTKHPL will be the biggest in the capital market of the country in terms of volume of shares. The 456-MW hydropower project has paid-up capital of Rs 10.59 billion.
Though it also plans to issue a total of 15 percent primary shares to general public, it is issuing 34 percent of its shares to the locals of Dolakha, staff of Nepal Electricity Authority (NEA), UTKHPL, lending institutions and the borrowers of the Employees Provident Fund (EPF) in the first phase.
Citizens Investment Trust is the issue manager of UTKHPL. The shares will have face value of Rs 100 each.
“In the first phase, we are issuing primary shares to Dolakha locals and staff members of lending partners including the depositors of EPF,” Sushil Kumar
Aryal, chief manager of CIT, told Republica. “We have already allocated 15 percent of the total shares to general public. It will be floated after getting Sebon´s nod. For this, we have already submitted our files.”
Aryal said they would begin the process of floating shares to locals and lenders within a couple of weeks.
The project had sought application from Sebon to issue public shares on July 15, 2013.
UPTKHPL will issue 10 percent or 1.59 billion units of shares to residents of Dolakha district. Depositors of EPF — one of the lending institutions for the biggest hydropower project — will be getting a total of 17.89 percent or 1.9 billion units of shares.
Likewise, employees of UKHPL and Nepal Electricity Authority — the main promoter of the hydropower company — will be getting 3.84 percent, or 406.27 million units, of the total shares. Apart from this, the staff members of four lending institutions — Nepal Telecom, Rastriya Beema Sansthan (RBS), CIT and EPF — will be getting 2.18 percent or 230.6 million units of shares.
Meanwhile, the share allotment plan has drawn criticisms. Employees of NEA has filed a lawsuit at the Supreme Court, claiming that the company was giving ´undue´ advantage to the lenders by allocating higher units of shares to their staff members. The plaintiff has also demanded allocation of higher number of shares to NEA employees.
It is because of the lawsuit that Sebon was delaying permission to UTKHPL to float public shares. “However, as the apex court did not issue stay order, we felt we should not make further delay in giving the company go-ahead to float its public shares,” a senior official of Sebon told Republica.
NEA holds 41 percent stake in the mega project, while Nepal Telecom (6 percent), CIT (2 percent), RBS (2 percent) are the other promoters.
Earlier in 2011, UTKHPL had signed loan agreements with EPF for Rs 10 billion, with CIT for Rs 2 billion and with RBS for Rs 2 billion. The government has agreed to provide remaining Rs 11.08 billion as loan.
Source : Republica