Shareholders allow Silva Pharma till Dec 2023 to use IPO fund

The shareholders of Silva Pharmaceuticals Limited have approved the company's proposal to extend its time to utilise the initial public offering (IPO) fund till 31 December 2023.

According to its initial plan, the company was supposed to use the IPO fund by 10 April 2020.

The company secured its general shareholders' approval at its annual general meeting on Thursday. But it still needs the approval of the Bangladesh Securities and Exchange Commission (BSEC) to extend the deadline. 

Silva Pharma said, in a stock exchange filing on Thursday, the Covid-19 pandemic, and the ongoing Russia-Ukraine geopolitical situation have caused disruptions in the supply chain. 

Also, devaluation of the taka and other macroeconomic uncertainties have put additional pressure on the company's cost management.

As a result, the company could not complete the import of some capital machinery on time, and hence, it needs more time to use the IPO fund.

Back in 2018, Silva Pharma raised Tk30 crore from the stock market. 

The company said it would use the fund to acquire machinery and equipment, implement civil construction, and repay loans.

But it failed to do so on time and had already extended its fund utilisation deadline twice. 

The company paid a 3% cash dividend only to its general shareholders for fiscal year 2021-22. 

In FY22, both its revenue and net profit decreased slightly year-on-year and stood at Tk78 crore and Tk10 crore, respectively.

In the July-September quarter of the ongoing fiscal year, its revenue fell by 8% to Tk19.76 crore, and net profit fell by 34% to Tk2.57 crore compared to the same quarter of the previous fiscal.

Since 21 October this year, its shares have been stuck on floor price at Tk21.60 each at the Dhaka Stock Exchange.