Emerald Oil to keep 7.81% shares as security on loan for working capital
Emerald Oil Industries — Spondon-branded edible oil producer — has secured regulatory approval to keep shares as security on a loan out of mandatory holdings by 30% of sponsor-directors to meet working capital.
The owner of Emerald Oil, Minori Bangladesh, owns 38.26% shares of the company. Of the shares, it had bought 7.81% or 46.66 lakh shares from the secondary market, and the rest were owned from issuance of new shares against its share money deposits.
The Bangladesh Securities and Exchange Commission (BSEC) has granted the company permission to pledge its sponsor shares without a lock-in period, but subject to certain conditions.
According to a BSEC letter, Minori Bangladesh could not be allowed to pledge or use as margin of 30% holding, and the newly-issued shares will remain lock-in for three years, and could not be kept pledge or lien.
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Now, the Minori will be able to keep shares as security on a loan, which it bought from the secondary market.
Minori Bangladesh – a subsidiary of the Japanese farming company Minori Co Ltd – took over the oil producer in 2021.
The company invested around Tk31 crore to revive the defunct company after getting approval from the securities market regulator.
After that, in January last year, the BSEC allowed Emerald Oil Industries to issue 3.15 crore new shares in favour of Minori Bangladesh, allowing the new investors to secure a majority stake in the company's board.
Afzal Hossain, managing director of Emerald Oil Industries, told The Business Standard, the company has applied to the commission in this regard. The company wants to meet working capital as security on a loan by using that portion of shares, he added.
Emerald Oil Industries recommenced production in January 2022, it faced impediments in achieving full capacity output due to a shortage of gas.
Due to the gas crisis, its factory operation has remained closed for the last two months.
In the July-September quarter of 2023, the revenue of the company stood at Tk69.75 crore, which was Tk26.92 crore in the same period of the previous year.
Its profit after tax stood at Tk13.40 crore and its earnings per share was Tk1.47 during the quarter.
The share price of the company closed at Tk80.90 on the Dhaka Stock Exchange yesterday.
Established in 2008, Emerald Oil initiated the production of its Spondon-branded rice-bran oil in 2011 and ventured into the stock exchanges in 2014.
