Ring Shine Textiles losses continue in Jan-Mar quarter

Ring Shine Textiles Ltd has reported another quarter with losses which the company attributed to difficulty in importing materials essential for their operations.

In the January to March quarter, the company reported a loss of Tk48.58 crore, compared to a loss of Tk36.50 crore in the same period of the previous year. 

According to the company, this downturn was primarily due to challenges in securing essential raw materials due to difficulties in opening letters of credit (LCs). Without access to these materials, the company faced production challenges, contributing to its financial losses during the period. 

The company's revenue for the quarter dropped sharply to Tk39.40 crore, down from Tk75.48 crore in the same period the previous year. This resulted in a per-share loss of Tk0.97, with the company's net asset value per share standing at Tk7.31 negative at the end of March 2024.

Auniruddho Piaal, the managing director of Ring Shine Textiles Ltd, explained that the company faced significant challenges in conducting business during the January to March quarter, primarily due to a shortage of raw materials which severely hindered their ability to operate effectively. 

Moreover, the company's business was further disrupted by attempts to change ownership. These attempts caused many customers to redirect their orders to other companies, further increasing the company's woes. 

For the nine months from July to March, Ring Shine Textiles reported a total loss of Tk119.32 crore, a significant increase from the Tk74.31 crore loss reported during the same period the previous year.

In August last year, the Bangladesh Securities and Exchange Commission (BSEC) conditionally allowed Wise Star Textile Mills Ltd and five Singapore-based companies to buy Ring Shine's shares, including those held by the sponsor-directors. 

However, in September last year, the board of directors of Ring Shine Textiles Ltd expressed concerns about the credibility of the six companies that were set to collectively take over a 38% stake in the textile firm. 

Of these, Wise Star would hold only 2% of the shares, while the other five companies would hold the remaining 36%.

In February of this year, the High Court stayed the operation of Ring Shine Textiles Ltd's board, which had been reconstituted by the BSEC, for six months. 

Ring Shine was the first large manufacturing company to raise Tk150 crore through an initial public offering (IPO) using the fixed price method in 2019. However, after its listing, it struggled to conduct business properly due to various issues.