Thukten Zangpo 

About 8.58 million unsubscribed rights shares of Druk PNB saw 173 percent oversubscription or 23.42 million subscribers during the three-day live auction.

The discovered price was Nu 30.1 per share during the closing of the auction as of 5pm on July 26. The successful subscribers will be allotted the shares on July 31.

The rights issue is an issue of shares offered at a special price by a company to the shareholders in proportion to their holding of old shares.

From June 20 to July 14, the Bank announced a rights issue of 1:1, which means that for every 1 share, the existing shareholders can purchase 1 share at Nu 17 per share against yesterday’s market price of Nu 49.59 a share. The bank had offered about 84 million shares worth around Nu 1.43 billion to current shareholders.

As the rights issue closed on July 14 this year, still 8.58 million shares remain unsubscribed. As per the regulations, these shares have to be traded in an auction. Individuals who are not shareholders of Druk PNB can also participate.

An official from the Royal Securities Exchange of Bhutan (RSEB) said that the company can keep only Nu 17 per share which is the initial offer price and the shareholder who did not subscribe to the rights issue will get the remaining amount.

Suppose, an existing shareholder has 100 shares and he or she did not subscribe to the rights issue, the person will get the difference amount between the initial offered price and discovered price in the auction. For 100 shares, it comes to Nu 1,310.

An RSEB official added that the amount will be deposited to the existing shareholders’ account.

He added that 90 percent of the shareholders subscribed to the rights issue while 15,715 shareholders did not.

The bank offered rights to augment the capital of the bank to ensure business growth of the bank and to maintain the minimum capital adequacy ratio (CAR) requirement as per the prudential regulation guidelines of Royal Monetary Authority.