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| Kathmandu, Friday February 28, 2003 Falgun 16, 2059. |
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HDL sandwiched between
Nepse & defaulters
Shares listing blocked
Post Report
KATHMANDU, Feb 27 : Nepal Stock Exchange (Nepse)
has embargoed the enlisting of the HDL shares citing vast disparity in financial
projections made by Himalayan Distillery Ltd (HDL) prior to and after the issuance of
equity shares worth over Rs 173 million in September 2001.
The distillery at the time of share issuance had
projected profits of Rs 32.7 million for the current fiscal year. However, later it
outlined a cash loss of Rs 12 million (net loss of Rs 24 million) for the first six months
of the current fiscal year. The company had first applied for enlistment more than a year
ago.
Likewise, against the net profit projection of
Rs 3.08 million for the previous fiscal year, as stated in the prospectus, audited
accounts showed a net loss of over Rs 82 million. Similarly, the net loss for the fiscal
year 2001/02 stood at Rs 28.5 million.
"There is a vast disparity in financial
projections made in the prospectus during share issuance and what was provided to the
stock exchange. Hence, that the listing of the shares has been blocked," said Mukunda
Nath Dhungel, Nepse General Manager.
The HDL officials said that the vast difference
in projection is not intentional and that the disparity arose due to adverse
circumstances. The HDL shares were floated at around the same time when women wing of the
Communist Party of Nepal-Maoist began an anti-liquor campaign and Shah Distillery in
Nepalgunj was arsoned.
The HDL officials, nonetheless, are still
hopeful that the public limited company’s shares would be enlisted in the stock
exchange. However, experts are of the opinion that chances of early enlistment of the HDL
shares in the stock exchange are remote.
Non-enlistment of the HDL shares will directly
impact over 1,100 stockholders who responded to the call for investment. Over 183 thousand
shares of the distillery, out of the total 1,734,600 shares, allocated to the public
cannot be traded now.
A major factor that caused the HDL incur loss is
the nose-dive. Sale of most of the HDL brands lately saw a steep decline due to various
external factors, including the campaign of the women wing of the CPN-Maoist. Against the
turnover of Rs 347 million in 2001/02, the actual sales stood at only Rs 94.8 million.
Likewise, the HDL had projected to sell Rs 437
million worth of its liquor brands in the current fiscal year. However, actual sales
figure for the first six months of fiscal year 2002/03 stood at a mere Rs 73.3 million,
which, nonetheless, is better performance than that of the first six-months of the last
fiscal year.
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