SEBON Releases Right Share and FPO Issuance for Sectors Other than Finance

December 8: Securities Board of Nepal (SEBON) has released the issuance of right shares and further public issue for the listed companies of sectors other than bank, finance company and insurance. Previously, SEBON formed a committee in a bid to make the right shares and FPO of the sectors other than aforementioned sectors obvious, fair and transparent. SEBON released the right share and FPO issuance on December 6 applying eight point conditions and standard as per the report submitted by the committee.

"The new standard is implemented to make the secondary market transaction of listed companies that are not regulated by separate bodies including hydropower, hotel, manufacturing and processing more organised," said Niraj Giri, Executive Director of SEBON. With the SEBON decision, these companies can now mobilise capital through right share and FPO. However, the capital thus accumulated can be spent on the predetermined sectors set by SEBON.

The board has also set standards for the right share or FPO issuing organisation or projects promoted by those organisations. First of all, the organisation must endorsed the clear financial plan and strategies related with the mobilisation of funds accumulated through right share or FPO issuance from the annual general meeting.

Similarly, the board, issuing a statement, has said that the basis of grounds behind the proportion of issuing right shares should be apparent. Moreover, the companies must conduct credit rating after two years of issuing initial public offering. Likewise, the organisation can issue the right share or FPO only after payment of cent per cent issue capital.