Emerald Oil halts operations due to gas crisis

Emerald Oil Industries, the producer of Spondon-branded edible oil, has announced the temporary halt of its operations due to an ongoing shortage of gas supply to its factory. 

The disruption in gas supply has significantly impacted the production process, forcing the company to suspend activities and operate below full capacity, according to a disclosure made on the stock exchange on Thursday.

In an effort to resolve the issue and resume normal production, the company has imported a 12 MT capacity, 17.50 high-pressure Husk Boiler, which is currently being installed at the factory. The company plans to restart operations once the installation is completed and the new boiler is operational.

Despite the halt in production, Emerald Oil has reassured its employees and investors that no layoffs have occurred during this period, and the company is maintaining its workforce while working towards the resumption of full operations.

According to officials from the Bangladesh Securities and Exchange Commission (BSEC), the region has been facing an acute gas crisis for several months, which has directly impacted Emerald Oil's ability to maintain its usual production levels. 

The shortage has left the company unable to operate properly, forcing the suspension of operations. However, the company's management had not previously disclosed this ongoing issue to its general investors.

In January of this year, the company obtained regulatory approval to pledge shares as security for a loan, sourced from the mandatory 30% holdings of sponsor-directors, to meet its working capital needs. 

Minori Bangladesh, which owns 38.26% of Emerald Oil, acquired 7.81%, or 46.66 lakh shares, from the secondary market, while the remainder was obtained through the issuance of new shares.

The BSEC has granted the company permission to pledge its sponsor shares without a lock-in period, although certain conditions must be met. 

A BSEC letter noted that Minori Bangladesh is prohibited from pledging or using its 30% holding as collateral or margin, and any newly-issued shares will remain under a three-year lock-in period, with restrictions on pledging or encumbering these shares.

Minori Bangladesh, a subsidiary of Japan's Minori Co. Limited, took over Emerald Oil in 2021. As of yesterday, the company's shares closed at Tk24.90 on the Dhaka Stock Exchange.

Emerald Oil, established in 2008, began producing Spondon-branded rice-bran oil in 2011 and was listed on the stock exchange in 2014.