Legacy Footwear to invest paid-up capital fund in stocks
Legacy Footwear has been facing challenges due to a lack of working capital and difficulties in opening letters of credit in recent years
Legacy Footwear plans to invest in the capital market an unused portion of its paid-up capital fund, which was raised through a private placement in April last year.
The export-oriented company on Thursday received approval from the Bangladesh Securities and Exchange Commission (BSEC) to invest Tk13.21 crore that remained unused after loan repayments.
According to the regulatory consent, the company will invest Tk5 crore in blue-chip stocks remaining in the DS30 index of the Dhaka Stock Exchange (DSE), while Tk8.21 crore will be used as working capital for the company.
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Additionally, the commission has extended the utilisation period up to June 2025.
Quazi Rafi Ahmad, managing director of Legacy Footwear, told The Business Standard, "After repaying bank loans, the company will use the new capital to complete a new unit for local customers."
He added, "The company also aims to penetrate the local market, a large portion of which is held by non-branded products. If the firm can provide quality products at affordable prices, its sales will increase quickly."
In April last year, the shoemaker increased its paid-up capital to Tk43.08 crore from Tk13.08 crore by issuing three crore new shares. These shares were issued at a face value of Tk10 each to its directors, in addition to existing shareholders, against cash consideration through private placement.
Legacy Footwear has been facing challenges due to a lack of working capital and difficulties in opening letters of credit in recent years. To address this crisis, the company decided to increase its paid-up capital and meet regulatory requirements.
Earlier, the company received an exemption of around Tk19.94 crore in interest from Rupali Bank and has to repay approximately Tk11.66 crore to the bank.
The company's share price closed at Tk70 on the Chittagong Stock Exchange on Thursday. Companies like Apex Footwear have also focused on the local market alongside their export business and are performing well locally.
