Lub-rref seeks approval to utilise Tk56cr IPO funds as working capital | The Business Standard
Skip to main content
  • Epaper
  • Economy
    • Aviation
    • Banking
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Thursday
May 29, 2025

Sign In
Subscribe
  • Epaper
  • Economy
    • Aviation
    • Banking
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
THURSDAY, MAY 29, 2025
Lub-rref seeks approval to utilise Tk56cr IPO funds as working capital

Stocks

Salah Uddin Mahmud
09 May, 2024, 10:05 pm
Last modified: 10 May, 2024, 01:10 am

Related News

  • Shushilan distributed eid gifts among children in char areas and Rohingya Camps
  • Govt likely to trim subsidies in new budget
  • Bangladesh in global peacekeeping
  • A promise kept in a land divided by war
  • Commerce minister's visit to elevate Dhaka-Beijing comprehensive ties to new heights: Ambassador Yao

Lub-rref seeks approval to utilise Tk56cr IPO funds as working capital

In 2021, the company successfully raised Tk150 crore from the capital market to purchase machinery and repay existing loans. From there, the company is yet to utilise Tk56 crore designated for purchase of machinery. 

Salah Uddin Mahmud
09 May, 2024, 10:05 pm
Last modified: 10 May, 2024, 01:10 am
Infographics: TBS
Infographics: TBS

Lub-rref (Bangladesh) Ltd, renowned for its lubricants under the BNO brand, faces a critical challenge in sustaining its operations due to a shortage of working capital. 

The company is strategically considering utilising funds raised through its initial public offering (IPO) as working capital to address this pressing issue. This move aims to boost liquidity and ensure continuity in its business endeavours amidst the current financial constraints.

It has already submitted an application to the commission seeking support from the funds raised through its initial public offering (IPO). 

In 2021, the company successfully raised Tk150 crore from the capital market to purchase machinery and repay existing loans. From there, the company is yet to utilise Tk56 crore designated for purchase of machinery. 

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

However, during the IPO phase, the company had communicated its intention to utilise the funds for the modernisation of its plant.

But, within six months after the IPO, the company opted to divert the rest of the allocated funds towards a new project situated in Julda along the banks of the River Karnaphuli, deviating from the initially proposed plant modernisation plan. 

The project will include a jetty, a tank terminal, a modern base oil refinery, a hydrogen plant and a specialised bitumen plant. 

This decision was prompted by the unfolding impacts of the Covid-19 pandemic, the Russia-Ukraine war, and broader global economic uncertainties. The cumulative effect of these crises also led Lub-rref into a liquidity crunch. So, the company now seeks to repurpose the IPO funds as working capital to navigate the current financial turmoil. 

However, any deviation from the originally stated utilisation of IPO funds necessitates formal approval from both general shareholders and the relevant regulatory bodies. Failure to secure such approval would compel adherence to the terms outlined in the IPO prospectus.

Mofijur Rahaman, the chief financial officer (CFO) of Lub-rref, pointed out that the abrupt decline in working capital accentuated particularly on the onset of the Russia-Ukraine conflict. "This decline was aggravated when banks refrained from extending term loans to support liquidity requirements. Later, the company temporarily utilised the IPO funds to secure a term loan for the Julda project, reimbursing the amount," he added.

He said, "The base oil refinery project cost was Tk1,283 crore including Tk150 crore IPO fund. Of this project, Tk900 crore was loans and Tk750 crore foreign loans which were supposed to be used as LC for the project.

"But due to the global crisis and local liquidity shortage, the disbursement of those loans is experiencing delays," he further added. 

Given the situation, the company is now able to operate at around 30 to 40% of its normal capacity due to a shortage of raw materials. 

The CFO further emphasised on the necessity of getting the regulatory approval, noting that it would facilitate seamless business operations and enable the company to fulfil its dividend commitments to investors. 

With regulatory clearance, Lub-rref anticipates a smoother path forward in overcoming the current crisis and sustaining its operations effectively. 

Now, the company has to inject two or three times the funds to import raw materials as their prices are high globally. 

In the July to March period, the company made revenue of Tk54.44 crore, which was Tk16 crore in the same period of the previous year.

Its profit after tax stood at Tk4.07 crore and earnings per share stood at Tk0.28. 

As of 30 April 2024, sponsors and directors jointly held 35.69%, institutions 8.38%, foreign investors 0.08%, and the general public 55.85% shares in the company.

The last trading price of its shares was Tk22.20 each at the Dhaka Stock Exchange on Thursday (9 May).


Salah Uddin Mahmud is a Staff Correspondent at The Business Standard who covers the stock market, insurance and the private sector.

Bangladesh / Top News

Lub-rref / IPO / Bangladesh

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Representational image. Freepik
    Govt likely to trim subsidies in new budget
  • Representational Photo: Collected
    All jewellery stores across Bangladesh to shut down indefinitely from today
  • US President Donald Trump speaks during a swearing-in ceremony of Special Envoy Steve Witkoff in the Oval Office at the White House in Washington, DC, US, May 6, 2025. REUTERS/Kent Nishimura/File Photo
    US court blocks most Trump tariffs, says president exceeded his authority

MOST VIEWED

  • Google Pay. Photo: Collected
    Google Pay likely coming to Bangladesh soon
  • IFIC Bank receives Tk6,000 cr in new deposits in six months
    IFIC Bank receives Tk6,000 cr in new deposits in six months
  • Dhaka areas at a gridlock on Wednesday, 28 May 2025. Photo: Syed Zakir Hossain/TBS
    BNP, Jamaat rallies: Traffic clogs Dhaka roads, including Motijheel, Paltan, Dainik Bangla intersection
  • Abdul Awal Mintoo, chairman of National Bank Limited. Sketch: TBS
    'Regulatory support must for National Bank to restore depositors' confidence'
  • Mohammad Abdul Mannan, chairman FSIB Ltd. Sketch: TBS
    FSIB to bounce back soon
  • Mohammad Mamdudur Rashid, managing director and CEO, UCB. Sketch: TBS
    Customers’ trust and confidence fueling deposit growth at UCB

Related News

  • Shushilan distributed eid gifts among children in char areas and Rohingya Camps
  • Govt likely to trim subsidies in new budget
  • Bangladesh in global peacekeeping
  • A promise kept in a land divided by war
  • Commerce minister's visit to elevate Dhaka-Beijing comprehensive ties to new heights: Ambassador Yao

Features

In recent years, the Gor-e-Shaheed Eidgah has emerged as a strong contender for the crown of the biggest Eid congregation in the country, having hosted 600,000 worshippers in 2017. Photo: TBS

Gor-e-Shaheed Boro Maath: The heart of Dinajpur

2d | Panorama
The Hili Land Port, officially opened in 1997 but with trade roots stretching back to before Partition, has grown into a cornerstone of bilateral commerce.

Dhaka-Delhi tensions ripple across Hili’s markets and livelihoods

3d | Panorama
Photo: Collected

Desk goals: Affordable ways to elevate your study setup

3d | Brands
Built on a diamond-type frame, the Hornet 2.0 is agile but grounded. PHOTO: Asif Chowdhury

Honda Hornet 2.0: Same spirit, upgraded sting

3d | Wheels

More Videos from TBS

Low Pressure over the Bay of Bengal, Signal No. 3 Issued for Sea Ports

Low Pressure over the Bay of Bengal, Signal No. 3 Issued for Sea Ports

25m | TBS Today
The fight between two brothers; Adidas vs Puma

The fight between two brothers; Adidas vs Puma

11h | Others
Trump is again keen to make Canada the 51st state

Trump is again keen to make Canada the 51st state

12h | Others
Trump's tariff strategy and Europe's investment politics, violence or negotiation?

Trump's tariff strategy and Europe's investment politics, violence or negotiation?

13h | Others
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net