Bangladesh Plantation approved to exit stock market

Infographics: TBS

The Bangladesh Securities and Exchange Commission (BSEC) has approved the exit plan of Bangladesh Plantation, a loss-making and non-compliant company, from the capital market.

Listed on the Dhaka Stock Exchange since 1991, the tea producer will now have to buy back a 29.12% stake from general investors at the prevailing market rate of Tk240 per share. The face value of the share is Tk10.

In the last week of March, the commission approved the plan, according to a BSEC official familiar with the development. However, no letter has been issued in this regard so far.

According to BSEC officials, the company will execute an agreement regarding the exit plan with the stock exchange within three working days of receiving a letter from the commission.

The offer price for buying securities under the exit plan will be not less than Tk240 for each share, as per the conditions. The company will also adhere to the proper public announcement requirement as specified.

The exit plan will be considered successful if 75% of the offloaded shares can be purchased within the specified time frame mentioned in the offer letter.

The remaining funds will be transferred to the Capital Market Stabilization Fund upon successful completion of the exit plan. However, the stock exchanges will take the necessary action to suspend the trading of the company's securities.

A senior official of the company, which owns a tea estate named Baikunthapur in Habiganj and operates a factory producing high-quality black tea, said, "We have applied to the commission for an exit from the capital market. The company has yet to receive any letter in this regard."

He added, "Upon receiving approval, we intend to initiate the exit process as directed by BSEC."

According to the company statement, the cost of production has increased due to a gradual rise in salaries and wages, as well as an increase in gas and electricity rates.

Additionally, costs in the financial sector have risen due to increasing loan interest rates and falling prices of products in the auction market. As a result, the company has been incurring losses for years.

The authorised capital of the company was Tk1 crore, and its paid-up capital was Tk10 lakh.

The sponsors and directors jointly hold 70.88% of the of the shares, while the public holds 29.12% of the of the shares of the company. The company is in operation now.

The last share price of the company in the over-the-counter market was Tk240.  

In December 2021, the commission decided that 21 companies would exit the OTC market of the stock exchanges.

Of these, Beximco Synthetics, Savar Refractories Ltd, Jessore Cement Company, Hill Plantation, Arbee Textiles, and Azadi Printers Limited are in the process.

The DSE launched its OTC in October 2009 with 51 companies.