ACME Pesticides misses IPO fund deadline, seeks six more months

Amid delays in fund utilisation due to legal complications, Acme Pesticides — a producer of fertilisers, pesticides, seeds, and related agricultural products — has sought a second six-month extension to use its IPO proceeds, as the first extension expires in June.

Before applying for an extension to the Bangladesh Securities and Exchange Commission (BSEC), the publicly listed firm has called an extraordinary general meeting (EGM) on 30 July, to be held in a hybrid format, to secure shareholders' approval.

Previously, the company's shareholders approved fund utilisation until June at its annual general meeting (AGM) for the first time. Now, it seeks another six-month extension until December.

According to the latest report, around 32% of the funds raised through the IPO remained unutilised as of April 2025.

As per the IPO fund utilisation report prepared by Ashraf Uddin & Company, Chartered Accountants, the unutilised IPO proceeds, including accrued interest, stood at Tk9.51 crore as of 30 April.

In its prospectus, the company had intended to use Tk5.50 crore from the IPO proceeds to repay loans, but this amount remains fully unutilised due to a sub-judice matter with National Finance.

Additionally, 20.54% of the allocation for acquiring new plant and machinery, and 22.04% of the IPO expenses also remained unutilised.

The IPO fund allotments for these purposes were Tk10.50 crore and Tk1.85 crore, respectively.

With a view to expand its business, Acme Pesticides raised Tk30 crore fund from the capital market in 2021 issuing shares an IPO. The funds are supposed to utilize within 24 months.

Amid failure to use the fund within the stipulated time, the company was allowed by its shareholders to use it by June in its AGM.

Sabuj Kumar Ghosh, company secretary of Acme Pesticides, told TBS, "We have a loan repayment issue with National Finance involving around Tk5 crore. Later, National Finance filed a suit, which is now a sub judice matter. That is why we failed to utilise the fund within the stipulated timeframe."

"We hope that, if the expected extension is granted, we will be able to fully utilise the fund," he added.

The company's auditor reported that no bank loan had been repaid by Acme Pesticides using IPO proceeds as of 30 April, as a money suit filed by National Finance led to the freezing of a fixed deposit amounting to Tk10.06 crore.

ACME Pesticides has raised funds for using for building and other construction, Loan repayment, Acquisition of new machinery for the company, Electric installation and IPO expenses.

Until the 2022-2023 fiscal year, the company had managed to make profit, but in 2023-24 fiscal year, it incurred a loss of Tk10.27 crore with a per share loss of Tk0.76. despite the loss, it had paid 0.25% cash dividend for its shareholders.

The loss-making situation is not improved for the 2024-25 fiscal year as it incurred a Tk13.80 crore loss with a per share loss of Tk1.02 in the first nine months.

During the July to March period, its net revenue jumped by 235% to Tk40.62 crore, which was Tk12.11 crore in the same time of the previous fiscal year.

In February, ACME Pesticides faced downgrading to the Z category as it failed to disburse declared dividend to its shareholders for FY24.

Upon disbursement of dividends, the Dhaka Stock Exchange (DSE) upgraded ACME Pesticides shares to the B category.

As of May, out of its total shares, sponsor-directors of the company held 31.80%, institutional investors 14%, and the general public held 54.20%.