January 14, 2024 | Investopaper
Nepal Electricity Authority (NEA), witnessing increased financial strength among public institutions, is set to initiate the sale of ordinary shares (IPO) amounting to Rs 60 billion. This move aligns with the restructuring of the organization’s financial framework and adheres to the Nepal Electricity Authority Act, 2041.
The Ministry of Finance has already granted approval for the share sale, and the Ministry of Energy, Water Resources, and Irrigation is gearing up to submit the necessary proposal to the Council of Ministers. During a Board of Directors meeting held on Mangsir 25, it was decided to maintain the authorized capital at Rs 300 billion, with approval sought from the Council of Ministers through the Ministry of Energy. In accordance with Securities Registration and Issuance Regulations, 2073, approval is being sought to issue shares to the general public at a premium price, capped at 10 percent of the proposed authorized capital.
Shakti Bahadur Basnet, Minister of Energy, Water Resources, and Irrigation, and Chairman of the Authority’s Board of Directors, emphasized the issuance of shares to enhance the institution’s strength, making it accessible to the public.
ICRA Nepal has assigned ‘AA+ Plus Credit Rating,’ to NEA indicating a high ability to meet financial obligations with low default risk. This credit rating is based on a thorough analysis of financial conditions, assets, risks, managerial capabilities, and environmental factors affecting operational effectiveness.
Nepal Electricity Authority, wholly owned by the government, serves as a strategic organization with a monopoly on electricity transmission, distribution, and trade within and outside the country. The authority has projected a net profit of Rs 12.33 billion in the last financial year 2079/80.