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Rastriya Banijya Bank to offload cross holding shares through auction from Sunday

Rastriya Banijya Bank is offloading cross holding shares of Nepal Investment Bank and Nepal Aawas Finance partially to small investors, if they are not fully subscribed.

The fully-government owned bank has decided to offload its 6,220,066 units of Nepal Investment Bank shares and 198,497 units of Nepal Aawas Finance through open bidding from Sunday, said Rastriya Banijya Bank chief executive officer Krishna Prasad Sharma, here today. “If the stakes are not fully subscribed, we will sell them partially,” he said, adding that the promoters shares of the bank and finance company will be sold as they are profitable.

The finance market regulator, central bank, had asked all the banks and financial institutions to offload cross holding shares by the end of last fiscal year 2013-14.

However, the Rastriya Banijya Bank’s earlier efforts of selling the promoter shares of these two financial institutions failed as it did not get any bulk buyer.

This time, we will go for partial allotment later on, if the all shares do not get subscribed,” Sharma added.

The bank –  organising a press meet here today – has asked interested firms and individuals to submit their sealed bidding. The bidding will open from Sunday and close on September 15 at 28 collection centers across the country, he informed.

Chief executive officer of Nabil Investment banking – the sales and issue manager for the bank – Praveen Raman Parajuli hoped that all the shares would be subscribed.

The bank has fixed Rs 530 as the minimum bidding price for Nepal Investment Bank’s share and Rs 101 for Nepal Awas Finance’s share.

Interested bidders must place bid for a minimum of 100 units, according to Sharma.

Both the financial institutions have offered good return to their investors. In the last fiscal year, Nepal Investment Bank distributed 35 per cent dividend –25 per cent cash and 10 per cent bonus shares – to the shareholders,whereas Nepal Awas Finance distributed eight per cent dividend.