As a share registrar, Civil Capital is expected to complete digitization of the bank´s share transaction by mid-July. Currently, the bank follows traditional bookkeeping practice of inserting share trading information in ledgers. [break]
“Once the electronic record of shares that changed hands till date is prepared, the process of relisting the bank on Nepal Stock Exchange (Nepse) will begin,” Civil Capital CEO Bhishma Raj Chalise told Republica.
Maheshwor Lal Shrestha, coordinator of NBL, confirmed it.
Established in November 1937, the bank, which has a negative net worth of Rs 4.5 billion, was delisted from Nepse in 2008 following the launch of financial sector reform program. It is planning to put its name back on Nepse´s trading board as this is mandatory for issuing rights shares, which is crucial to raise capital it needs to bury the holes in its balance sheet.
Currently, the bank is planning to issue rights shares at the rate of 1:9.5, meaning it is asking its shareholders to purchase 9.5 shares for every stock they own. This is expected to raise Rs 3.62 billion, of which Rs 1.5 billion will come from the government as it owns 40.19 percent stake in the bank.
As per the recapitalization plan approved by the Ministry of Finance, the bank should complete the process of distributing these shares by November 15 and listing these shares on Nepse by December 15.
However, the bank is not likely to meet these deadlines as it has failed to appoint issue manager by Thursday as per its plan. A senior bank official on condition of anonymity said: “The process of appointing issue manager may not begin before mid-July.”
The bank is banking on rights issue to fix its balance sheet and is hoping for a positive public response in this regard as it is still the third largest bank in the country in terms of asset. However, many have been questioning the rationale behind purchasing shares of a bank which has a negative net worth - an indication which may pour cold water on the bank´s ambitious recapitalization plan.
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