BSEC rejects Mir Akhter Hossain's Tk250cr fundraising plan thru preference shares
To obtain shareholder consent, the company held an extraordinary general meeting (EGM) in February
The Bangladesh Securities and Exchange Commission (BSEC) has turned down a proposal by Mir Akhter Hossain Limited to raise Tk250 crore through preference shares to repay loans and borrow further funds.
The construction firm had floated the plan in December last year, aiming to issue redeemable, cumulative, non-convertible, and non-participative preference shares. The proposal required approval from both shareholders and the BSEC.
To obtain shareholder consent, the company held an extraordinary general meeting (EGM) in February.
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However, in a stock exchange filing yesterday, Mir Akhter Hossain Limited said, "The BSEC has informed that the commission is not in a position to accord consent to the company for raising of capital through issuance of preference shares."
Preference shares are not added to a company's ordinary shares and remain separate in its financials. They do not count towards earnings per share (EPS) and do not grant ownership rights.
However, holders are entitled to receive dividends before ordinary shareholders and have priority in asset redemption if the company goes bankrupt.
According to Mir Akhter's financial statement for the nine months ending in March, its long-term loans rose to Tk1,528.97 crore from Tk1,462.69 crore in the same period of the previous fiscal year.
During this period, revenue fell by 43% to Tk97.74 crore from Tk166.87 a year earlier, while profits dropped to Tk11.81 crore from Tk18.26 crore.
Mir Akhter had previously raised Tk125 crore through an initial public offering (IPO) under the book-building method to expand operations, acquire equipment, and repay bank loans.
The cut-off price for shares was set at Tk60 following the bidding process.
Yesterday, its share price closed at Tk25.20 each on the Dhaka Stock Exchange (DSE).
Earlier, in March 2022, the securities regulator approved the issuance of the Mir Akhter Zero Coupon Bond worth Tk249.90 crore to refinance debt and increase capital equipment.
