Kathmandu, May 25: The
Security Board of Nepal (SEBON) Wednesday informed that applications of the
bank and financial institutions (BFIs) for right share issuance would be
approved within two weeks.
Announcing new
provision on the issuance of right share of the BFIs, the capital market
regulator said that the new arrangements would facilitate the companies in
meeting the ceiling of paid-up capital of Rs. 8 billion by mid-July next year,
as announced by the Nepal Rastra Bank in its Monetary Policy for the Fiscal
Year 2015/16.
“The SEBON will study the documents submitted
by the companies and suggest for improvement and amendment in the application within
seven working days after receiving the application. Final approval would be
issued within 5 days after receiving the documents with compliance,” said the
SEBON in a press release.
The SEBON expressed its
hope that the new provision would expedite the process of right share issuance
and make capital mobilization more effective.
A couple of weeks
earlier, the Board had allowed the BFIs to issue their right share without credit
rating of respective companies.
However, any company planning
to issue right share should propose to issue the right share at the face value,
net worth of the company should be more than Rs. 100, the market price of the
share should be more than the face value.
Similarly, such company
should be in operation for at least five years and earned profit for the last
three years, non-performing assets shouldn’t have crossed the limit set by the
NRB and the capital increment plan of the company should be registered in the
Office of Company Registrar, said SEBON.
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