Middle Bhotekoshi to issue 29.4m sharesMiddle Bhotekoshi Hydropower Company has received permission from the Securities Board of Nepal (SEBON) to issue shares to the public. The developer of the 102 MW Middle Bhotekoshi Hydropower Project plans to issue 29.4 million general shares worth Rs2.94 billion in three phases.
Middle Bhotekoshi Hydropower Company has received permission from the Securities Board of Nepal (SEBON) to issue shares to the public. The developer of the 102 MW Middle Bhotekoshi Hydropower Project plans to issue 29.4 million general shares worth Rs2.94 billion in three phases.
In the first phase, the company will issue 14.4 million shares valued at Rs1.44 billion to the depositors and employees of the Employees Provident Fund (EPF) which is financing the construction of the project. In the second phase, the company will issue 6 million shares worth Rs600 million to the project-affected locals of Sindhupalchok district where the power plant is being constructed. In the third phase, the company will make an initial public offering (IPO) of 9 million ordinary shares worth Rs900 million to the general public and its employees.
Middle Bhotekoshi has a debt-equity ratio of 50 percent which refers to the amount of debt it has used to finance the project. The company has taken a Rs6 billion loan from the EPF which is 50 percent of the total construction cost of the project, and the remaining 50 percent will come from the sale of its shares. Out of the total equity investment of Rs6 billion, 49 percent will be raised through the IPO.
The company has appointed Global IME Capital, Civil Capital, NIBL Ace Capital, CBIL Capital, Sanima Capital, Prabhu Capital and Laxmi Capital as issue manger for the IPO.
The development of the Middle Bhotekoshi Project was initiated by Chilime Hydropower Company, a subsidiary of the Nepal Electricity Authority, and the plant was slated to come online by 2017. Construction was delayed by a massive landslide at the project site in 2014 and devastating earthquakes in 2015.
Lately, the construction work on the project has gathered momentum, and it has made around 45 percent progress, according to Sunil Lama, project manager of Middle Bhotekoshi. Project officials told the Post that Guanxi Hydro Electric Construction Bureau, the Chinese contractor hired to implement the project, was making satisfactory progress, and that they were confident of meeting the revised completion deadline of June 2019.
More than 50 percent of the tunnel has been dug. “Out of the 7.1 km of tunnel required for the power plant, 4.1 km has been completed,” said Lama. “Currently, the contractor is working on diverting the river so that it can start the construction of the head works of the project.”
The development of the project was initially estimated to cost Rs12.28 billion. The project office revised the estimate upward to Rs14.84 billion due to time overruns and an appreciation of the US dollar against the domestic currency.