Lossmaking Beximco Synthetics wants to delist from capital market

Lossmaking Beximco Synthetics, which has failed to provide dividends to its investors for the last eight years, has now opted to delist from the country's two stock exchanges.

The company, engaged mainly in manufacturing and marketing polyester filament yarn, has already applied to the stock market regulator to learn how to delist from the bourses. 

Meanwhile, the Bangladesh Securities Exchange Commission (BSEC) has decided to suspend the trading of the company in the interest of investors. 

Officials at the stock exchanges said to The Business Standard that they received a directive from the commission to suspend the trading of Beximco Synthetics from Tuesday.

The company authorities are ready to settle the liabilities of the investors, sources said.

But the company authorities have not yet applied to stock exchanges.

The company operates in a single industry segment. It is also partially engaged in manufacturing and marketing-oriented yarn, plus drawn textured yarn which the company sells on the local market.

OK Chowdhury, director of Beximco Synthetics, told The Business Standard that the company has been incurring losses for many years.

"In such a situation, considering the general shareholders' interest, we want to delist the company from stock exchanges. In this regard, we have sent a letter to the BSEC to know the way forward," he added.

He also said as part of delisting, the company's directors will have to buy back the shares from the stock markets. "To know the buying price, we have sent the letter to the regulator."

The company, which sells its products locally, has been losing its market due to a reduction in duty fees on the import of synthetic yarn.

OK Chowdhury further said that the locally produced manmade yarn is costlier than the imported yarn. "Due to the reduction in duty fees, we will not be able to continue the business." 

Sources in the BSEC said that the company has applied to the commission to learn how to delist from the capital market. 

According to the sources, the company has not been able to pay dividends to its shareholders due to it having incurred losses for years.

The company has not paid any dividend to its investors since 2012. 

As a result, general investors are hurting the remaining investment.

For this reason, the company wants to be free from liabilities by returning the dues to the investors. 

It will collect shares from investors at face value. The regulator and Beximco Synthetics have met more than once in this regard, added the sources.

The company was listed on the capital market in 1993. Beximco Synthetics Limited was incorporated in Bangladesh in 1990. It launched its manufacturing operation in 1994.

In the first nine months of the last fiscal year, the company's loss per share was Tk2.05, which was Tk2.53 in the previous year.

Company's short-term loan is Tk15.48 crore and a long-term loan is Tk28.50 crore as of June 2019.

The company's sponsors and directors jointly hold 35.67%, institutions 17.93%, foreign investors 0.02%, and general investors 46.38% of shares in the company. 

The last trading price of the company was Tk8.50 on Monday.