- Public
Companies in Nepal:
- Public companies in Nepal authorized to issue securities under prevailing securities laws can issue shares at a premium price, provided they adhere to the specified terms and conditions outlined by the Companies Act 2063.
Issuing Securities at a Premium under the Securities
Registration and Issue Regulation 2063:
- Conditions
for Issuing Securities at a Premium:
- Net
Profit Requirement:
- The
institution must have been continuously profitable, operating with a net
profit for the last three years.
- Alternatively,
institutions with a paid-up capital of at least one billion rupees profitable for the last two years are also eligible to issue
securities at a premium price.
- Net
Worth Condition:
- The
institution’s net worth per share must be higher than the paid-up
capital per share, ensuring financial stability and investor confidence.
- Approval
by General Meeting:
- The
decision to issue securities at a premium must be formally approved by
the institution’s general meeting, ensuring transparency and shareholder
consent.
- Determination
of Premium Price:
- The
premium price must be determined based on a comprehensive securities
valuation report, which is certified by external experts or recognized
expert institutions.
- The
valuation report should include the methodology used, its justification,
and the supporting evidence for the premium price, ensuring a fair and
transparent process.
- Directive
Compliance:
- The
institution must comply with all provisions related to premium price
determination as outlined in the relevant directives, ensuring adherence
to legal and regulatory standards.
- Credit
Rating Requirement:
- The
institution must have achieved at least an average or higher credit
rating grade, signifying its financial health and risk assessment, which
is crucial for investor trust.