GQ Ball Pen to sell land to repay partial Southeast Bank loan
The company will sell its 7.67 katha land, that is lying idle, at Tk3.45 crore
GQ Ball Pen Industries – a loss-making manufacturer of pens that was once well-known for its 'Econo' brand – is going to sell its unused land in Chattogram to repay a portion of its loan taken from Southeast Bank.
According to a Dhaka Stock Exchange (DSE) disclosure on Sunday, the company will sell its 7.67 katha land that is lying idle at Tk3.45 crore.
The company's total short-term loan from Southeast Bank stood at Tk3.14 crore, as per its annual report for the fiscal 2021-22.
GQ Ball Pen said in the disclosure that it will use the proceeds from the sale of its land to pay off Tk1.16 crore out of the total loan from Southeast Bank.
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And, the rest of the sale proceeds will be used on a priority basis.
On Sunday, the company's share price rose by 4.85% to Tk82.1, compared to the previous trading session.
GQ Ball Pen has been incurring losses since the 2017-18 fiscal year.
But despite the losses, the company has been paying cash dividends from its retained earnings to the general shareholders.
According to its FY22 annual report, the company's retained earnings stood at Tk18.55 crore, which was Tk35.09 crore in FY18.
In FY22, despite a 53% year-on-year revenue growth, the company incurred a loss of Tk2.36 crore.
GQ Ball Pen began its journey in 1981 with an aim to meet local demands. Its business went well for the first 30 years. But due to multiple challenges, the company began losing its market after 2012.
Owing to its declining sales and rising costs of operations, the company is counting losses. Investments in the stock market and fixed deposits are now the sole means of profit for GQ Ball Pen Industries.
Out of the company's total shares, sponsors and directors hold 41.88%, institutional investors 1.47%, foreign investors 0.05% and general investors 56.60% as of January 2023.
