Metro Spinning’s stock dividend rejected again
It recommended 3% cash and 5% stock dividends for FY22
The Bangladesh Securities and Exchange Commission (BSEC) has denied Metro Spinning Limited permission to issue a stock dividend back-to-back for two fiscal years.
The company had recommended a 5% stock dividend for the fiscal 2020-21. But after the dividend got rejected, on 30 October 2022, it again recommended the same dividend for the 2021-22 fiscal year.
After more than two months of recommending the dividend, the company said in a stock exchange filing on Wednesday that the BSEC rejected its stock dividend for FY22.
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The yarn manufacturer wanted to issue the stock dividends to raise its paid-up capital.
But the BSEC rejected it because of the company's failure to follow the guidelines for issuing stock dividends.
Now, Metro Spinning will have to pay only the 3% cash dividend, which it recommended along with the stock dividend, to its shareholders for FY22.
Last time the company paid a cash dividend was back in the fiscal 2019-20. It had paid a 2% cash dividend for that fiscal year.
Metro Spinning is currently listed under the 'B' category of the Dhaka Stock Exchange.
As per BSEC rules, if a company fails to pay any dividend for two consecutive years, its category will be changed.
But although Metro Spinning skipped the 2020-21 fiscal year for paying any dividend, it will stay under the 'B' category as it is paying a cash dividend for FY22.
In FY22, despite a 2.64% fall in revenue, the company's net profit increased by 39% to Tk8.5 crore from Tk6.09 crore in FY21.
