Sebon brings new norms for rights issue, FPO

Published On: December 7, 2016 09:44 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 7: Securities Board of Nepal (Sebon) has introduced a new set of conditions and standards for the listed companies, except bank and financial institutions (BFIs) and insurance companies, for rights and follow-on public offerings (FPOs)

Issuing a statement on Wednesday, Sebon said that the new conditions and standards for listed companies to float rights issue and FPO was adopted based on the recommendation of a committee that it had formed. The new conditions and standards are aimed at making the rights and FPO floating fair and transparent, according to Sebon officials.

According to new rules, a listed company looking to float rights issue or FPO should first get its plan and strategy of utilizing the fund drawn from such issues approved by its annual general meeting. Similarly, a listed company would be allowed to float rights issue or FPO only after two years of going public.

The listed company that wants to launch rights or follow-on public offering should meet pre-conditions like completing credit rating, having fully paid share capital, and acquiring letter of intent permit or approval from respective authority if the fund is planned to be used in any new project. 

According to the new requirement, a listed company that wants to float rights issue or FPO should complete financial closure at least five days before publishing public notice about such issuances.


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