National Tea placement share subscription resumes after year-long halt
The publicly traded National Tea Company Limited has announced the new subscription date for its Tk279.7 crore placement shares, originally scheduled around a year ago but postponed by the regulator, as mandated by a recent court order.
The subscription will be open from 19 June to 19 August during banking hours, following a letter from the Bangladesh Securities and Exchange Commission directing the resumption of the proposed capital raising as per the High Court order, according to the company’s disclosure.
The purpose of issuing placement shares is to support business growth, finance working capital needs, and repay bank loans. However, the company could not complete the modernization project and other initiatives due to a lack of funds. As a result, its turnover is decreasing due to the declining average sale price in the auction market for its products, according to company officials.
Following the court order, there has been significant progress in the implementation of the state-owned company’s plans.
In July last year, Jakir Hossain Sarkar, who owns only 10 National Tea shares, filed a writ petition with the High Court against the company’s scheme of issuing fresh shares approved by the BSEC, alleging that the firm did not treat all its existing shareholders equally.
Later, the court upheld the BSEC’s consent. Upon a petition by the market regulator, the chamber judge of the Appellate Division put the High Court order on hold.
In all these issues, shareholders are the ones to suffer, as after the record date, the price of National Tea shares dropped in adjustment with the upcoming increased number of shares, and now the issuance of placement shares is uncertain.
In April last year, National Tea secured BSEC approval to raise its paid-up capital by issuing 2.34 crore shares at Tk119.53 each, including a Tk109.53 premium per share.
Of the shares, the government, Investment Corporation of Bangladesh, and Sadharan Bima Corporation will get 1.24 crore shares at an average ratio of 4.43 new shares for each existing share, sponsor-directors 13.8 lakh shares at a ratio of 3.21:1, and general shareholders nearly 96 lakh shares at a 2.85:1 ratio.
On Wednesday, National Tea shares closed at Tk388.60 each at the Dhaka Stock Exchange. The company was incorporated in 1978 and listed on the capital market in 1979. It cultivates, manufactures, and sells tea and rubber in the local market. The company’s average annual production is about 52 lakh kg of tea, the majority of which is sold through the Chattogram auction market.
