National Tea Company Limited has extended the subscription period for its placement shares by one month, now set to close on 19 September.
Previously, the closing date was set for 19 August, with the subscription having initially begun on 19 July.
The decision to extend the subscription period was made by the company’s board of directors and was disclosed on the stock exchanges’ website today.
On 17 July, the National Tea announced the new subscription date for its Tk279.7 crore placement shares, originally scheduled around a year ago but postponed by the regulator, as mandated by a recent court order.
The purpose of issuing placement shares is to support business growth, finance working capital needs, and repay bank loans.
However, the company could not complete the modernisation project and other initiatives due to a lack of funds. As a result, its turnover is decreasing due to the declining average sale price in the auction market for its products, according to company officials.
In July last year, Jakir Hossain Sarkar, who owns only 10 National Tea shares, filed a writ petition with the High Court against the company’s scheme of issuing fresh shares approved by the Bangladesh Securities and Exchange Commission (BSEC), alleging that the firm did not treat all its existing shareholders equally.
Although the High Court initially upheld the BSEC’s consent, the chamber judge of the Appellate Division later put the High Court order on hold following a petition by the market regulator.
All these issues and delays have impacted shareholders, particularly after the record date, as the price of National Tea shares dropped in adjustment with the upcoming increased number of shares. The uncertainty surrounding the issuance of placement shares has further added to shareholders’ concerns.
In April last year, National Tea secured BSEC approval to raise its paid-up capital by issuing 2.34 crore shares at Tk119.53 each, including a Tk109.53 premium per share.
Of the shares, the government, Investment Corporation of Bangladesh, and Sadharan Bima Corporation will get 1.24 crore shares at an average ratio of 4.43 new shares for each existing share, sponsor-directors 13.8 lakh shares at a ratio of 3.21:1, and general shareholders nearly 96 lakh shares at a 2.85:1 ratio.
Source: The Business Standard