Ring Shine Textiles resumes partial operation after 9 months

With help of the securities regulator, the Ring Shine Textiles Ltd has partially resumed its factory operation with 25% capacity on Sunday, after keeping it closed for nine months.

After the news was published on the Dhaka Stock Exchange (DSE) website, Ring Shine's shares worth Tk29 crore were traded and secured the sixth position at the turnover chart at the end of Sunday's trading session.

This reflects the investors' hope that the company, which manufactures gray and finished fleece fabrics of various qualities and dyed yarn, will return to profit after reopening its factory.

Earlier, in September last year, the company declared to shut the factory due to order cancellation for the Covid-19 pandemic and working capital shortage.

The company owned by Singaporean entrepreneurs raised a fund of Tk150 crore from investors to set up denim plants and repay bank loans in 2019.

When it got listed with both the stock exchanges by issuing 15 crore shares at face value of Tk10, investors showed a great response to the new shares and its price rose by 50% to Tk15 on the first trading day.

After that the investors came to know about its financial weakness and its share price came down to Tk4.70.

In this circumstance, to protect the investors' interests, on 26 January this year, the Bangladesh Securities and Exchange Commission (BSEC) reconstructed the company's board of directors, which is currently composed of former police officials, Dhaka University teachers, former bankers, and market professionals.

Also, the stock market regulator has appointed a special auditor and set up a committee to investigate the reason behind the failure of the company.

The securities regulator also allowed the company to use the IPO (initial public offering) fund of Tk40 crore to repay its liabilities and working capital.

Istak Ahmed Shimul, an independent director of the reconstructed board, told The Business Standard, "We are trying to reopen the factory fully and turn the company into profitable organisation."

The company posted more than Tk50 crore profit on an average for three years from FY17 to FY19.

FY20 has ended more than eleven months ago, but it failed to publish the annual financial statement. Investors are also in the dark about when the company will disclose its financial statement.

In the first half of FY20, the company reported a profit of Tk37.32 crore. But in the January-March quarter of 2020, it incurred a loss of Tk7.91 crore.

Out of total shares of the company, general investors hold 52.18% shares, institutional investors 16.23%, foreign investors 0.05%, while its sponsors and directors have the remaining shares.