An agreement to this effect was signed by Kyle Kelhofer, IFC country manager for Bangladesh, Bhutan and Nepal, and Ashok Shumsher Rana, chairman of RMDC, on behalf of IFC and RMDC, respectively.[break]
This is the first time an international investor has made equity investment in the company, which works as a wholesale lender to microfinance institutions in the country.
As per the agreement, IFC has agreed to buy each share at a premium of Rs 180 over the face value of Rs 100. Once the shares are purchased, IFC, a member of the World Bank Group, will own 8.25 percent stake in the company, according to RMDC.
Currently, 13 commercial banks own 90.57 percent of the company´s shares. Another 6.58 percent stake is owned by Nepal Rastra Bank, 2.08 percent shares belong to five rural development banks and 0.77 percent stake is jointly owned by Deposit and Credit Guarantee Corporation and Nirdhan Utthan Bank.
Shankar Man Shrestha, CEO of RMDC, called IFC´s decision to purchase RMDC´s equity a “milestone in the history of the organization”. “This will help boost RMDC´s operations and enhance the credibility of the company,” he said.
Kelhofer also expressed happiness over the partnership, as he said the IFC strongly believes in the potential of microfinance institutions and small and medium enterprises in bringing about positive socio-economic changes.
The partnership between the two was unveiled at a time when the RMDC is planning to float its shares to the public for the first time.
The company, with a paid up capital of Rs 320 million, has already appointed Ace Capital Limited as an issue manager and is all set to release 1.56 million units of shares on the market “within a month”.
Each of these shares will be sold at a premium of Rs 180 over the face value of Rs 100, Shrestha said.
He also informed about the company´s intention to float 140,000 additional units of shares to various institutional investors.
Once all these processes -- of selling equity to institutional investors and launching the IPO -- end, the company will have a capital of Rs 52 million, Shrestha said.
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