BSEC rejects Confidence Cement’s rights share application
Company’s share price closed at Tk49.70 today
The Bangladesh Securities and Exchange Commission (BSEC) has rejected the rights share application of Confidence Cement PLC, which intended to raise funds to meet rising investment costs of its associate company, Confidence Cement Dhaka Limited.
In a disclosure on 21 December, the Chattogram-based cement manufacturer — a concern of Confidence Group — announced its plan to raise Tk100 crore by issuing one rights share for every three existing shares, each priced at Tk45, including a Tk35 premium, according to a DSE filing.
However, due to volatility and liquidity shortages in the capital market, the company later revised the rights offer, lowering the price by Tk10 per share to make it more accessible and to raise funds for the associate company's investment needs.
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In a price-sensitive statement, Confidence Cement said its board of directors had revised the offer after evaluating current market conditions and prioritising the best interests of investors.
On Monday, the company's share price closed at Tk49.70 on the Dhaka Stock Exchange (DSE).
On 3 December, the DSE downgraded the company from the 'A' category to the 'Z' category due to its failure to disburse the approved dividend – a violation of listing rules. However, the company was reinstated to the top category two days later after clearing the dividend payments.
Earlier, a senior company official explained that the stock market is currently experiencing a liquidity crisis, with daily turnover hovering around Tk300 crore amid reduced investor participation.
As a result, the board opted to lower the premium to make the rights offer more affordable, he added.
Confidence Group has so far invested around Tk815 crore in constructing a new cement factory near the capital, aiming to expand its business and capture a larger share of the Dhaka-centric cement market.
The factory, located in Narsingdi, is expected to begin operations in the first quarter of next year, with an annual production capacity of 18 lakh tonnes, officials said.
Previously, in 2023, Confidence Cement had planned to raise Tk150 crore by issuing preference shares, but later dropped the plan, deeming it unsuitable, according to a company source.
