Upper Tamakoshi Hydropower Limited (UPPER) is currently conducting an auction for its unclaimed right shares, which commenced on the 13th of Poush and is scheduled to conclude on the 29th of Poush, 2080. The auction involves 1,70,19,530 units of ordinary right shares, representing the remaining portion of the rights offering issued by the company. The rights offering, in a 1:1 ratio, occurred between the 18th of Bhadra and the 22nd of Ashwin, 2080, where a total of 105,900,000 shares were issued. Eligible shareholders were allotted 8,88,80,470 shares, leaving 1,70,19,530 shares unclaimed. The ongoing auction is managed by Sunrise Capital Limited.
The minimum bid rate for the auction is set at Rs. 100, with a minimum bid quantity of 100 units and a maximum bid quantity of 5,00,000 units. After the adjustment of the proposed right share, UPPER’s paid-up capital will increase to Rs. 21.18 Arba.
In its recent financial report for the first quarter of the fiscal year 2080/81, UPPER reported a net profit of Rs. 1.00 Arba, resulting in an annualized earnings per share of Rs. 25.20. The net worth of the company stands at Rs. 60.97, with Rs. 73.01 Arba in long-term loans and Rs. 3.04 Arba in short-term loans.
Upper Tamakoshi Hydropower Limited closed at Rs. 198 per share on January 9th, with a 52-week high of Rs. 590 and a low of Rs. 190. Established in 2007 by the Nepal Electricity Authority, UPPER is a key player in the hydropower sector, focusing on the Upper Tamakoshi Hydroelectric Project.
The decision to issue 100% right shares aims to strengthen UPPER’s financial position amid challenges faced during the construction of the Upper Tamakoshi Hydroelectric Project. Unforeseen circumstances and a prolonged construction period led to increased costs, prompting the issuance of right shares to address rising interest expenses. The issuance was approved during the 14th Annual General Meeting in 2079, aligning with the company’s commitment to financial restructuring and stability.
The construction phase of the project initially had a loan-to-equity ratio of 70% to 30%, but the evolving financial landscape and increased costs necessitated a shift in this ratio. The proposed right shares will contribute to stabilizing the company’s financial health and facilitate further growth opportunities. UPPER aims to fulfill its financial requirements, ensuring it remains well-positioned to navigate future challenges and contribute significantly to Nepal’s energy sector.
Regarding the company’s capital across fiscal years, after the adjustment of 100% right shares, UPPER’s authorized capital for 2080/81 stands at Rs. 30 Arba, with issued and paid-up capital also at Rs. 21.18 Arba. The Mathillo Tamakoshi Jalbidhyut Yojana, a run-of-river type project, is the flagship project with a maximum output of 456 MW.
The management team, led by CEO Mr. Mohan Prasad Gautam, oversees various aspects of the company’s operations. The board of directors plays a crucial role in guiding UPPER’s strategic decisions.
In conclusion, UPPER’s move to issue 100% right shares presents an opportunity for investors to acquire shares at a lower price. The ongoing auction of unclaimed right shares provides investors with a chance to participate and potentially enhance returns. Existing shareholders can consider averaging their cost price through this opportunity.