Nurani Sweater turns defaulter in 3 years of listing

KEY FINANCIALS

• Borrowed Tk16 crore as short-term loan from AB Bank
• Raised Tk43 crore through IPO in 2017
• Used Tk11.8 crore of the amount to repay bank loan
• Loss per share was Tk0.41 for FY20
• Share price was Tk7.7 per share on Wednesday
  

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Within three years of getting listed with the capital market, Nurani Dyeing & Sweater Ltd has turned into a big loan defaulter.

However, the sweater exporter did not disclose that loan information in its annual audited financial reports.

In its financial report for 2016-17, Nurani Sweater mentioned that it took out Tk16 crore in a short-term loan from AB Bank.

However, the bank on Wednesday served two legal notices on the sweater maker asking it to repay the loan of Tk226 crore as early as possible.

Those loans were disbursed by the Gulshan branch of AB Bank. Its manager Laila Anjuman also acknowledged to The Business Standard that the bank has issued legal notices to recover the loans.

The legal notices also said Nurani Dyeing & Sweater is a loan defaulter with this bank, which is why the bank tried to withdraw the amount through its two collateral cheques to recover their investments but those cheques were dishonoured on 11 November this year due to insufficient balance.

The bank in its legal notices warned that the sweater maker should repay the loan within the next 30 days. Otherwise, the bank will take legal actions against it.

The legal notices included four members of the board of directors as defendants. They are Chairman Rehana Alam, and directors SK Nur Mohammed Azger, Bibi Hajera and Md Anwarul Hoque.

The bank's former managing director SK Nurul Alam was made another defendant. However, he passed away on 16 April last year.

Industry sources said the garment exporter has been suffering under the new management.

The company has raised Tk43 crore from the capital market through an initial public offering in 2017. 

Of the amount, Tk11.80 crore was spent to repay its bank loan and the rest was invested to expand its business. However, its business gradually went down after the new investment.

The company posted a Tk0.41 loss per share in the fiscal year 2019-20, and the losing trend continued till the first quarter of this fiscal year.

According to the Dhaka Stock Exchange data, the company's each share was traded at Tk25 on the debut trading day but its closing price stood at Tk7.7 per share on Wednesday.

Ever since its listing on the stock market, the company offered 2% cash dividends to its shareholders in 2018.

The factory started its commercial operation on 5 February 2009 as a 100% export-oriented Yarn dyeing and sweater knitting industry.

The company has already closed its Dhaka office and shifted to Feni, according to a DSE disclosure.

The Business Standard tried to communicate with its Company Secretary Sarwar Ahmed over the matter but could not reach him at his official numbers on Wednesday.

Out of total shares of Nurani Dyeing & Sweater, 51.78% are owned by general investors.

Meanwhile, sponsor directors hold only 30.93% of the company's shares and the rest of its shares belong to institutional investors.