National Tea’s share subscription awaits HC clearance
The publicly listed National Tea Company Limited has postponed the subscription of its placement shares worth Tk279.7 crore as instructed by the Bangladesh Securities and Exchange Commission (BSEC).
The company said in its Dhaka Stock Exchange (DSE) filing on Thursday that the securities regulator instructed it to wait for the order from the High Court regarding the share subscription.
Placement shares are new equity shares issued to investors, which increase the number of shares in a company and the paid-up capital.
The subscription was supposed to open on 10 July and continue till 10 September this year.
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Jakir Hossain Sarkar, who owns only 10 National Tea shares, filed a writ petition with the High Court against the company's scheme of issuing fresh shares approved by the BSEC, as he alleged that the firm did not treat all its existing shareholders equally.
Later, the High Court stayed the BSEC consent. Upon a petition by the market regulator, the chamber judge of the Appellate Division put the High Court order on hold.
In all these issues, shareholders are the ones to suffer, as after the record date, the price of National Tea shares dropped in adjustment with the upcoming increased number of shares, and now the issuance of placement shares is uncertain.
This April, National Tea secured BSEC approval to raise its paid-up capital by issuing 2.34 crore shares at Tk119.53 each, including a Tk109.53 premium against each share.
Of the shares, the government, Investment Corporation of Bangladesh, and Sadharan Bima Corporation will get 1.24 crore shares at a ratio average of 4.43 new shares against one existing share, sponsor-directors 13.8 lakh shares at a ratio of 3.21:1, and general shareholders nearly 96 lakh shares at a 2.85:1 ratio.
On Thursday, National Tea shares closed at Tk414 each at the DSE, which was 2.47% lower than the previous session.
The company was incorporated in 1978 and listed on the capital market in 1979. It cultivates, manufactures, and sells tea and rubber in the local market.
The company's annual average production is about 52 lakh kg of tea, the majority of which is sold through the Chattogram auction market.
At the end of the first three quarters of FY23, National Tea's loss per share stood at Tk46.02, which was Tk31.12 a year ago.
