Berger to hold EGM for rights offer approval

Berger Paints Bangladesh – a publicly traded multinational company – will hold an extraordinary general meeting (EGM) on 25 January to seek approval from shareholders for a rights share offer aimed at increasing the free float in the market.  

Additionally, the paint manufacturer will seek approval for the allotment of renounced shares by J&N Investments (Asia) to other shareholders and employees of the company.  

The EGM will be held through a hybrid platform, with the physical venue at Dhaka Regency Hotel in Nikunja.  

With the rights offer, the company plans to raise Tk303 crore to invest in its third factory at the National Special Economic Zone.  

According to its previous decision in December regarding the rights offer, Berger will issue 27.28 lakh shares at Tk1,110 each, including a premium of Tk1,100.  

To increase free-float shares to 10%, Berger's parent company J&N Investments (Asia) Limited, which holds a 95% stake in Berger Paints, will not participate in the rights offer.

A senior company officer told The Business Standard that under rights issue rules, J&N Investments is eligible to receive 23.18 lakh shares. However, these shares will instead be allocated to general shareholders, allowing them to receive one right for every share held. The remaining rights shares will be allocated to Berger's employees.

This is in line with stock market regulator instructions to increase free-float shares by 10% from the existing 5%.  

Previously, in January 2024, the company unveiled its plan to raise Tk375 crore by issuing 27.28 lakh rights shares at Tk1,376 each, including a premium of Tk1,366.  

However, following the BSEC's direction, the company revised its plan, lowering the price of shares to comply with public issue rules.  

Berger Paints has approved a 500% cash dividend, amounting to Tk231.88 crore, for the fiscal 2023-24, which ended on 31 March.  

This represents the highest-ever payout to its shareholders in terms of the total amount.  

In FY24, its consolidated net profit increased by 7.72% to Tk324 crore compared to the previous financial year, while its revenue rose by 1.09% to Tk2,583 crore compared to the previous year.  

Meanwhile, in the April-September period of this year, its revenue grew by 5.41% to Tk1,265 crore, while net profit jumped by 8.57% to Tk152.55 crore compared to the same period the previous year.  

On Thursday, its shares closed at Tk1,822 each on the Dhaka Stock Exchange.