Eastern Hydropower Limited has received prior approval from the Electricity Regulatory Commission to issue rights shares to its existing shareholders.

The commission granted the company approval to proceed with a rights issue in a 1:0.871 ratio, meaning existing shareholders will be eligible to purchase 0.871 additional shares for every one share they currently hold.

Based on the company’s existing paid-up capital of Rs. 62 crore, Eastern Hydropower plans to issue rights shares worth approximately Rs. 54 crore. The proposed issue amounts to Rs. 540,009,274 in total.

The rights issue is intended to raise additional capital from existing shareholders. However, the shares will not be opened for subscription immediately, as the company must obtain further regulatory approval before launching the issue.

Following the prior approval from the Electricity Regulatory Commission, the company will now seek approval from the Securities Board of Nepal (SEBON) for the proposed rights issue.

Only after receiving the required approval from SEBON will the company announce the issue details and open the rights shares for existing shareholders.

The 1:0.871 ratio represents a relatively large rights issue compared with the company’s existing capital base, with the proposed issue amount equivalent to nearly 87.1% of its current paid-up capital.

The company’s shareholders will therefore have the opportunity to increase their holdings through the rights offering once the issue receives final regulatory clearance.