BSEC rejects Salvo Chemical's 64 lakh share issuance plan
The Bangladesh Securities and Exchange Commission (BSEC) has rejected Salvo Chemical Industry's request to raise Tk6.40 crore by issuing 64 lakh shares to its existing sponsor-directors.
In a Dhaka Stock Exchange (DSE) filing today, the company announced that the securities regulator had rejected their application to issue the shares at Tk10 each.
Earlier in May, Salvo, a producer of basic industrial chemicals, had aimed to raise its paid-up capital by issuing the shares to its existing sponsors and directors through a private placement for cash consideration.
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When the company decided to issue fresh shares at face value, share prices at the secondary market were Tk50 each. Later, its share prices gradually declined below Tk30 each.
After publishing the information of BSEC's rejection to issue fresh shares, its share price declined by 2.36% to Tk28.90 each on the DSE.
According to the DSE, as of September, the sponsor-directors of Salvo Chemicals own only 25.18% of the company's shares, while the majority are held by general shareholders.
In February of this year, the BSEC granted Salvo Chemicals one year to achieve a minimum holding of 30% in the company.
Salvo intended to use the funds raised to increase working capital by Tk4.20 crore and to modify production through the import of machinery valued at Tk2.20 crore via LC, ensuring uninterrupted and smooth operations for the company.
In the first nine months of FY24, Salvo Chemicals reported revenue of Tk170.93 crore, a notable increase from Tk116.87 crore during the same period in the previous fiscal year.
Additionally, its net profit after tax for the July to March period of FY24 rose to Tk12.80 crore, compared to Tk9.20 crore for the same timeframe in FY23.
Salvo Chemical Industry specialises in the production of Sulphuric Acid and Battery Grade Water, and it has established a strong presence in the country's bulk chemical market.
According to its website, Salvo is now one of the leading manufacturers of Sulphuric Acid in Bangladesh.
