National Tea gets BSEC nod to raise Tk280cr thru new shares

The Bangladesh Securities and Exchange Commission (BSEC) has allowed the publicly-listed National Tea Company Limited to issue new shares, enabling the company to increase its paid-up capital.

The company will issue 2.34 crore ordinary shares through private placements among its existing shareholders. 

The stock market regulator allowed the company to issue the shares at Tk119.53 apiece – Tk10 face value and Tk109.53 premium – which means, the total fund to be raised is Tk279.7 crore.

Sources at the commission said the BSEC has given its consent on this matter as per the (Issue of Capital) Rules, 2001.

The company wants to raise funds for working capital, field and factory development, and repayment of bank loans.

The ratio of the placement shares, the record date for entitlement of those shares, the subscription period, and the list of bankers to the issue will be notified soon, the company said in a stock exchange filing on Sunday.

On Sunday, the National Tea Company's share price soared by 7.5% to Tk645.1 on the Dhaka Stock Exchange (DSE) compared to the previous trading session.

In September last year, the company announced that it wants to issue new shares at Tk118 each – Tk10 face value and Tk108 premium – for raising paid-up capital, and make its general shareholders eligible to receive three newly issued shares against each that they currently hold.

Currently, the government, the Investment Corporation of Bangladesh, and the Sadharan Bima Corporation hold 42.72% shares of the company, which will be increased to 51% through private placements. The remaining newly-issued shares will be allotted to the existing directors and general shareholders. Three directors of National Tea hold 10% of its shares.

At present, the company's paid-up capital is Tk6.6 crore, and the authorised capital is Tk25 crore. It wants to increase its paid-up capital in order to meet the regulatory requirements.

Incorporated in 1978 and listed on the capital market in 1979, the National Tea Company cultivates, manufactures, and sells tea and rubber in the local market.

The company's annual average production is about 5.2 million kg of tea, the major portion of which is sold through the Chattogram auction market.

In 2000, National Tea started selling tea in the local market on a small scale through its dealers. It has a sales centre at its registered office, which is open to all consumers.

There are about 12,500 permanent labourers in the company's 12 tea estates. Most of them are from ethnic groups and they stay in the gardens with their dependents.

The company has to provide food grain at a subsidised rate and free medical facilities for the labourers and their dependents along with free housing facilities. 

The company generated profits from 2000 to 2019. But the state-owned firm suffered losses over the last two years due to the Covid-19 pandemic.

As of 31 March 2023, the sponsors and directors jointly held 44.9%, the government 4.33%, the institutions 14.75%, and the general public held 36.02% of shares in the company.