28th September 2025, Kathmandu
The City Hotel Limited has officially announced an extension for the application deadline of its significant rights share issuance, offering investors an extended window to participate in the capital-raising exercise.
City Hotel Rights Share
This move provides existing shareholders with an invaluable second chance to increase their equity stake in the hospitality company.
Extension of the Application Deadline
The original closing date for the rights share application, which was set for Ashoj 12, 2082 (September 28, 2025), has been postponed. The new and final deadline for the rights issue is now Ashoj 26, 2082 (October 12, 2025). This two-week extension is a strategic measure aimed at ensuring maximum subscription and accommodating shareholders who may have faced logistical or financial constraints in meeting the initial cut-off.
Key Features of the Rights Offering
The rights issue, which commenced on Bhadra 23, 2082 (September 8, 2025), is a major undertaking for City Hotel Limited, designed to significantly boost its financial foundation for future growth in Nepal’s rebounding tourism sector.
- Rights Ratio: The company is offering new shares at a ratio of 8:10 (80 percent), meaning eligible shareholders can apply for 8 new shares for every 10 shares they currently hold.
- Issue Size and Value: City Hotel is slated to issue a total of 13,392,000 units of rights shares. The issue aims to raise NPR 1.3392 billion (NPR 1.33 billion) at the standard par value of NPR 100 per share.
- Purpose of Capital: The capital infusion is earmarked for the company’s expansion projects, facility upgrades, and strengthening its overall balance sheet to capitalize on the sustained growth in domestic and international tourism in key cities across Nepal.
Eligibility and Book Closure Details
To be deemed eligible to apply for the rights shares, an investor must have held shares of City Hotel Limited on the designated book closure date of Shrawan 27, 2082 (August 12, 2025). This means that only those individuals who were registered as shareholders on the Nepal Stock Exchange (NEPSE) records up to Shrawan 26, 2082 are entitled to subscribe to the rights offering. This strict adherence to the book closure date ensures the issue remains exclusive to the company’s current investor base.
Risk Assessment and Financial Outlook
For the purpose of this rights issue, the company was assessed by CARE Ratings Nepal, which assigned it a CARE-NP Double B Minus (Issuer Rating). This rating signifies a moderate degree of risk regarding the timely fulfilment of financial obligations. While it suggests a cautious approach is warranted, the rating also reflects the company’s established position and its potential to leverage the anticipated upswing in the hospitality sector, especially as the capital raised is intended to reinforce its financial position.
Simplified Application Procedure
The company has maintained a convenient and multi-channel application process to facilitate maximum shareholder participation:
- Issue Manager: Prabhu Capital Limited is serving as the official issue and sales manager.
- Physical Submission: Applications can be submitted at the main office of Prabhu Capital or selected branches of Prabhu Bank located in major cities, including Ilam, Jawalakhel, Birgunj, Pokhara, Butwal, Surkhet, and Dhangadhi.
- Online Application: The most convenient method is through the “Mero Share” online platform, developed by CDS and Clearing Limited. Alternatively, investors can apply via any bank or financial institution that participates in the C-ASBA (Centralized Application Supported by Blocked Amount) system.
Impact on Capital Structure
The rights issue will significantly transform City Hotel Limited’s capital base.
- Particular Before Rights Issue After Rights Issue (Projected)
- Paid-up Capital NPR 1.67 billion NPR 3.01 billion
- Rights Shares Issued N/A 13,392,000 units
- Total Funds Raised N/A NPR 1.3392 billion
This substantial increase in paid-up capital to over NPR 3 billion will provide a robust financial cushion, reduce reliance on high-interest debt, and enhance the company’s capacity to pursue its ambitious investment and expansion plans within Nepal’s competitive hotel industry.
Strategic Significance of the Extension
The decision to extend the application deadline is a win-win for both the company and the investor community. For existing shareholders, it offers precious extra time to arrange finances and make an informed decision about increasing their ownership at the attractive par value of NPR 100 per share. For the company, a successful and fully subscribed issue will ensure the realization of its full capital target, which is essential for executing its strategy in a sector poised for post-pandemic recovery and long-term growth.
Investors must ensure they complete the necessary steps—confirming eligibility, preparing sufficient funds, and submitting the application through C-ASBA or Mero Share—before the new closing date of Ashoj 26, 2082 (October 12, 2025). This is a critical opportunity to invest in a company positioned to benefit from the revitalization of the hospitality and tourism sector in Nepal.
For More: City Hotel Rights Share