Madhya Bhotekoshi Jalvidhyut Company to issue 29m unit IPO soon

Kathmandu, May 4: In what is the largest initial public offering (IPO) in Nepal so far, about 29.4 million primary unit shares of Madhya Bhotekoshi Jalavidhyut Company Limited (MBJCL) are likely to be floated in the market in the next few months.

In 2015, Hydroelectricity Investment and Development Company Limited (HIDCL) had floated 20 million unit shares worth Rs. 2 billion.

The JBJCL is a subsidiary company of Chilime Hydroelectricity Company established in 2010, which is developing the 102-megawatt Middle Bhotekoshi Hydroeletric Project in Sindhupalchowk district.

The company Thursday appointed seven merchant banks for the issue management of the IPO.

The company signed agreements with Global IME Capital Limited (GICL), Prabhu Capital Limited, Civil Capital Market Limited, CBIL Capital Limited, Sanima Capital Limited, Laxmi Capital Market Limited and Ace Capital Limited, said Paras Mani Dhakal, Chief Executive Officer of GICL.

These companies will work as the issue manager for the 29.4 million unit shares of Rs. 100 each, worth Rs. 2.94 billion, or 49 per cent of the total paid-up capital of the MBJCL.

After the appointment of the issue managers, the company will apply at the Security Board of Nepal (SEBON) for the IPO, which will go to the public within a couple of months after the Board’s approval.

The Employee Provident Fund, Chilime, Nepal Electricity Authority (NEA) and MBJCL are the equity investors, and 51 per cent of the shares are held by the promoters and 49 per cent by the public.

Chilime is the leading company with 38 per cent shares, said the MBJCL.

According to Dhakal, in the first stage, 11.7 million unit shares, equivalent to Rs. 1.17 billion, will be offered to the depositors of the Employment Provident Fund (EPF).

Likewise, 2.1 million unit shares worth Rs. 210 million will be floated for the employees of the equity investors, and 600,000 unit shares of Rs. 60 million for the employees of the lending organisations.

Similarly, the merchant banks will manage 6 million unit shares worth Rs. 600 million, which will be issued for the locals of Sindhupalchowk district in the second stage, and 9 million unit shares of Rs. 900 million will be issued to the general public and employees of the MBJCL.

The company had signed the Power Purchase Agreement (PPA) with the NEA in 2011.

Although the construction of the project was started in 2013, it was delayed by the constant obstruction of the political parties, Gorkha Earthquake and floods.