Officials of Sanjen Jalvidhyut Company Ltd (SJCL) are planning to apply at the Securities Board of Nepal (Sebon) to float public shares worth Rs 1.78 billion as soon as the share allotment process is completed. They see collecting interest-free cash from IPO as a better option than securing loan from Employees Provident Fund.
SJCL is developing two projects with combined capacity of 57.3 MW. The two projects were expected to start generation by December, 2015, but missed the deadline.
The company has already invested over 51 percent of the equity investment received from Nepal Electricity Authority, Chilime Hydropower Company and funds of local government including Rasuwa Development Committee.
Milap Bahadur Pandey, general manager of SJCL, said that they were waiting for the share allotment dispute to be resolved.
Employees of both Chilime and Nepal Electricity Authority have equal rights to apply for 3.5 percent of public shares. Chilime employees have been demanding that primary shares should be allotted in proportion to the promoter shares ownership.
Chilime owns 38 percent of promoter shares in SJCL, while NEA owns only 10 percent. If primary shares are not allotted in proportion to the promoter shares ownership, Chilime employees fear they will get few shares as Chilime has less than 100 employees compared to NEA's more than 10,000.
Biplav Khadka, a leader of employees' union at Chilime, said that they have launched protest at Chilime's Dhumbarahi-based office since last week. "We have the rights for larger stake as Chilime holds more promoters share in its subsidiary companies than NEA.
NEA has 51 percent ownership in Chilime.
The two projects are estimated to cost Rs 7.24 billion. According to Chilime officials, 50 percent of the project cost will come from equity investment and remaining will come from debt financing. Chilime, NEA, and project affected DDCs/VDCs own 51 percent of the equity investment. Of the remaining 49 percent, 15 percent will be issued to general public, 10 percent to project-affected locals, 19.5 percent to depositors of Employment Provident Fund, one percent to Employees of EPF and 3 percent to employees of promoters.
A committee led by Sher Singh Bhat, deputy managing director of NEA, has been formed to settle the issue. But the committee has not come up with a solution yet.
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