Berger Paints Bangladesh Limited has received approval from the Bangladesh Investment Development Authority (Bida) to obtain a $60 million loan from its parent company, J&N Investments (Asia) Limited.

According to a disclosure made on Thursday by Berger Paints, the country’s leading multinational paint manufacturer, the loan will facilitate the opening of letters of credit for the import of raw materials.

The loan will also be disbursed in phases based on business requirements, it added.

J&N Investments holds 95% of the shares of Berger Paints.

Sazzad Rahim Chowdhury, director and chief financial officer at Berger Paints Bangladesh, had earlier told The Business Standard, “The move comes as a part of our commitment to lend a hand to the country’s foreign currency reserves.”

“We will build a foreign currency reserve out of the loan to pay our import bills,” he said, adding that the shareholder’s loan would help smooth the company’s imports as well.

Berger Paints got listed on the capital market in 2006 by issuing shares representing only 5% of its paid-up capital.

Its shares closed at Tk1,778.20 each on Thursday, which was 0.30% higher than the previous session at the Dhaka Stock Exchange.

Earlier in May, the painting giant recommended a 400% cash dividend for the financial year that ended on 31 March 2023.

The company had paid a 400% cash dividend in the previous financial year as well.

During the year, Berger’s consolidated profit increased by 4% year-on-year and stood at Tk301 crore at the end of March 2023.

The company official said the sector is facing challenges because of pricey raw materials and the devaluation of the local currency against the dollar.

Berger Paints achieved higher revenue during the year, but high production costs and dollar appreciation ate up a big portion of the profit, he added.