BPC FPO Cancelled: Butwal Power Issues Rights Shares for Nepal Hydropower Funding
7th April 2025, Kathmandu
Butwal Power Company Limited (BPC) has decided to cancel its earlier plan for a Further Public Offering (FPO). Instead, the company will issue rights shares to raise capital for its ongoing and upcoming hydropower projects.
BPC FPO Cancelled
Board Decision to Issue Rights Shares
The decision was made during a board meeting on 4 April 2025. Initially, BPC had planned to issue 10 million FPO shares at NPR 100 each. This plan was aimed at attracting funds from public investors. However, after reviewing the situation, the board chose to withdraw the FPO proposal.
Details of the Rights Issue
BPC will now issue rights shares equal to 40% of its current paid-up capital. Existing shareholders will be given the opportunity to buy these shares in proportion to their current holdings. The rights shares will also be priced at NPR 100 each.
Currently, BPC’s paid-up capital stands at NPR 3.409 billion. This means the company will raise approximately NPR 1.36 billion through the rights issue, which will be used for its hydropower investments.
Why Rights Shares Over FPO?
This shift in strategy aims to secure funding while maintaining shareholder value. By offering shares to current shareholders, BPC avoids diluting ownership. It also provides loyal investors the opportunity to increase their stake in the company.
Seeking Regulatory Approval
Before moving forward with the rights offering, BPC will need approval from the Electricity Regulatory Commission (ERC). The company plans to secure this approval prior to presenting the issue at its upcoming Annual General Meeting (AGM).
A Strategic Shift in Fundraising
The cancellation of the FPO might come as a surprise, but market analysts believe the rights issue can still be a valuable fundraising tool. Rights offerings are generally quicker and less costly compared to FPOs. BPC is taking a more shareholder-friendly approach by choosing this option.
Supporting Hydropower Growth
BPC has built a solid reputation in Nepal’s energy sector through its involvement in several significant hydropower projects. The funds raised from this rights issue will be directed towards completing ongoing projects and potentially launching new ones in the renewable energy sector.
Investor Confidence and Market Reaction
Rights issues are often seen as a sign of confidence from the company. BPC is signaling that it expects its current shareholders to back its future growth plans. This move could help the company strengthen its position in the growing renewable energy sector in Nepal.
Looking Ahead
More information about the rights issue will be released in the coming weeks. Investors are eagerly awaiting details about the share ratio and the company’s plans for its hydropower projects.
Conclusion
BPC’s decision to issue rights shares instead of pursuing an FPO shows a flexible approach focused on maintaining strong relationships with existing shareholders. As Nepal continues to push for renewable energy, BPC is poised to play a major role in the country’s energy future.
