Alif Industries again faces BSEC rejection to raise Tk200cr fund
BSEC scrapped a prior approval for fund raising in September last year
The Bangladesh Securities and Exchange Commission (BSEC) has once again rejected Alif Industries' application to raise Tk200 crore by issuing shares to its directors, dealing a blow to the company's plan to revive ailing listed firm C&A Textiles.
In a filing to the Dhaka Stock Exchange yesterday, Alif Industries said the commission has cancelled its review application seeking permission to raise the capital.
The BSEC under the previous regime had allowed the fund raising initiative. However, the newly reconstituted commission, formed after the ouster of the Sheikh Hasina-led government in August, scrapped the previous approval in September as Alif Industries failed to raise the funds within the stipulated timeframe.
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After the cancellation, the company submitted a review application to the stock market regulator in October last year, which has now been formally rejected again.
Alif Industries had planned to raise Tk300 crore through convertible bond and Tk200 crore through issuance of shares to existing directors on cash consideration.
The funds were intended to support the revival of C&A Textiles Ltd that had collapsed after its owners fled the country following a loan scam, turning it into a non-performing entity.
Under the previous commission' approval, Alif was allowed to raise Tk200 crore through issuance of 9,09,09,091 ordinary shares at Tk22 each (including a premium of Tk12 per share) only to the existing directors of the company in cash consideration.
After the approval, the company decided to merge C&A Textile. But, following the rejection of both capital-raising methods, the company has decided to keep the proposed merger with C&A Textiles on hold.
Alif Group acquired C&A Textiles in 2021 after it had been shut down for several years. The acquisition was approved by the BSEC with the condition that C&A Textiles resume production. A trial production began in August 2022.
C&A Textiles was incorporated in 2001 and started commercial operations in 2003.
Alif Industries reported a 16% growth in revenue in the first nine months of 2024-25 fiscal compared to the same time of the previous fiscal year to Tk80.18 crore while during the July to March period, its net profit surged 33% to Tk11 crore with an earnings per share of Tk2.26.
In FY24, it made a profit of Tk10.43 crore with EPS of Tk2.36, and paid 10% cash dividend to its shareholders.
