Its share price jumps from Tk6.90 to Tk13.50 in a month
Shares of Bangladesh Welding Electrodes Limited (BD Welding) surged nearly 96% over the past month as investors reacted to the company’s disclosure that it is actively seeking a new investor to revive its long-shuttered operations.
From 16 November to 17 December, the share price of the Dhaka-based manufacturer jumped from Tk6.90 to Tk13.50, reflecting renewed market interest following regulatory disclosures about the company’s turnaround efforts.
On Thursday (18 December), the stock closed 2.22% lower at Tk13.20 on the Dhaka Stock Exchange (DSE).
The rally gained momentum after BD Welding responded to a DSE query on 27 November, confirming that it is in discussions to attract fresh investment to restart production.
The company said its board is hopeful that bringing in a new investor would allow it to reopen its factory, rehire workers and gradually stabilise its financial position.
BD Welding, which was listed on the stock exchanges in 1999, has not been in production since 2016. The company had regularly paid annual listing fees until 2012, but mounting operational and financial difficulties from 2013 onward led to significant arrears, which it is now seeking to clear in instalments once operations resume.
The company’s troubles stem largely from repeated natural disasters at its former factory in Chattogram. Until 2017, the facility was hit by recurrent flooding and landslides, at times remaining under five to six feet of water.
These events caused extensive damage to raw materials, finished goods and machinery. Although the assets were insured with Federal Insurance Company Limited, the insurer rejected the claims, prompting BD Welding to file a lawsuit.
While the company was awarded Tk2 crore in damages by a district court, the insurer appealed the verdict, and the case remains unresolved.
The prolonged shutdown also triggered loan defaults, leading banks to initiate auction proceedings against the factory. The then managing director managed to halt the auction, and following an extraordinary general meeting, the company sold the Chattogram factory land – excluding buildings and machinery – to repay its bank liabilities.
BD Welding later purchased land in Dhamrai, Dhaka, and shifted its machinery there. However, a lack of funds prevented the construction of a factory shed and reinstallation of equipment, leaving production suspended. Apart from two office staff, all employees were placed on unpaid leave.
In 2021, the Bangladesh Securities and Exchange Commission intervened by appointing independent directors and restricting the sale or transfer of company assets.
Following a reconstitution of the board, those restrictions were eventually lifted, allowing the transfer of the Chattogram property to be completed.
Source: The Business Standard
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