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| Kathmandu, Wednesday March 26, 2003 Chaitra 12, 2059. |
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‘HDL shares to be listed
soon’
Post Report
KATHMANDU, March 25 : The long drawn uncertainty
over the listing of shares of Himalayan Distillery Ltd. (HDL) is nearing end with Nepal
Stock Exchange (Nepse), the only secondary market for securities transaction in the
country, preparing to make the enlistment.
Stock market officials talking to The Kathmandu
Post said that an agreement to the effect would be signed within this week and the shares
of HDL would be duly listed for transaction in the secondary market.
"A listing agreement between Nepse and HDL
is likely to be signed on Wednesday," said Nepse General Manager Mukunda Dhungel
today. He added that all formalities needed for the listing of the HDL shares have been
completed.
The distillery had applied for enlistment of its
shares more than a year ago, a few months after it issued equity shares worth over Rs 173
million. The issuance had come as part of the HDL’s plans to turn it into a public
company.
Nepse since then had been declining to give a go
ahead to the listing process citing vast disparity in the financial projections made by
HDL prior to and after the issuance of its equity shares.
The distillery at the time of share issuance had
projected profits of Rs 32.7 million for the current fiscal year. The projected profit
figures were mentioned in the prospectus that was distributed to potential investors then.
However, the company later outlined a cash loss
of Rs 12 million (net loss of Rs 24 million) for the first six months of the current
fiscal year when it provided its statement to Nepse while applying for shares enlistment.
Likewise, against the net profit projections of
Rs 3.08 million for the previous fiscal year, as stated in the prospectus, audited
accounts showed a net loss of over Rs 82 million. Similarly, the net loss for the fiscal
year 2001/02 stood at Rs 28.5 million.
The listing process moved ahead with the HDL
making public notice about its financial state for the first six months of the current
fiscal year. The figures are not audited and are the same that was provided to Nepse.
"The public now knows the real figures, so that should be enough to go ahead with the
listing process," said Dhungel.
The latest turnaround in the stalled listing
process of HDL shares comes as sweet music to over 1,100 investors who had responded to
the HDL call for investment.
Rules necessitate that a company gets its shares
listed with the stock exchange in order that stock trading takes place. No shares are
allowed to be transacted outside the trading floor of the stock exchange. In other words,
an investor is not able to sell his shares if they are not listed, and hence his capital
gets locked up.
Over 183 thousand units of HDL shares, out of
the total 1,724,600 share units, have been allocated to the public.
Public turnout for HDL shares had been
considerably low due to a number of external factors, including then campaign of the women
wing of the CPN-Maoist to prevent the sale and consumption of alcohol throughout the
kingdom and the arsoning of Shah distillery in Nepalgunj. All shares were unwritten by 32
different financial institutions.
Meanwhile, Nepse and Central Finance Company
Ltd. (CFCL) today reached an agreement for the enlistment of CFCL’s 200,000 shares of
Rs 100 par value in the secondary market.
Sources at the secondary market also told The
Kathmandu Post that Life Insurance Corporation (LIC) Nepal also applied for enlistment of
its shares. However, LIC Nepal would need to make its financial position public before the
enlistment process moves ahead.
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