National Tea's paid-up capital raising procedure stayed
A glimpse of the company
● Formed in 1978, listed in 1979
● Products: Tea and rubber
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● Avg tea production per annum: 52 lakh kg
● Loss per share in first 9 months of FY23: Tk46.02
● Last DSE share price: Tk437.2
● Govt holds 4.33%, sponsors-directors 44.9%, institutions 14.75% and public 36.02% shares
The High Court stayed the procedure for raising the paid-up capital of National Tea Company Limited for three months due to unequal allocation of its shares.
The court order was issued on 31 May upon a writ petition filed by Jakir Hossain Sarkar, a shareholder in the company, his lawyer Kazi Ershadul Alam told The Business Standard.
In the petition, the shareholder stated that the distribution of shares was unequal, which was in violation of the Companies Act. His lawyer said, "My client seeks equal allotment of shares in accordance with the law."
The Bangladesh Securities and Exchange Commission (BSEC) and the company later moved to the chamber judge of the Appellate Division, seeking a stay on the High Court order.
In April this year, National Tea got consent from the commission to raise paid-up capital of Tk279.7 crore by issuing 2.34 crore shares at Tk119.53 each, including a premium of Tk109.53 per share.
As per the consent, the government, Investment Corporation of Bangladesh, and Sadharan Bima Corporation will get 1.24 crore shares at a ratio average of 4.43 shares against existing one share.
Sponsors and directors will get 13.80 lakh shares at a ratio average of 3.21 shares for one existing share, while general shareholders will get 95.39 lakh shares at a ratio average of 2.85 shares for one share.
At present, the company's paid-up capital is Tk6.6 crore, and the authorised capital is Tk25 crore. It wants to increase the paid-up capital in order to meet the regulatory requirements.
The company also announced the subscription date for the share allocation to investors. The subscription date is from 10 July to 10 September. Investors should apply for the shares within the scheduled time.
According to Jakir Hossain's petition, the company approved the increase in paid-up capital by allotting slab-based shares to the shareholders in the extraordinary general meeting in October last year. Later, the share allocation ratio was approved at the board meeting in April this year.
Jakir Hossain petitioned the High Court to hold the general meeting again under a new independent director as chairman.
Earlier, the company had fixed 15 May as the record date for preparing the list of eligible investors for share subscription. The share price of the company before the record date was Tk626.5.
The new share price is calculated by adding the 2.34 crore shares to be issued by the company on the record date. The adjusted share price of the company was Tk231.1 per share after the record date.
On Wednesday, its shares closed at Tk437.2 each on the Dhaka Stock Exchange.
Currently, the government holds 4.33%, sponsors and directors 44.90%, institutions 14.75% and public shareholders 36.02% of the company's shares.
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 52 lakh kg of tea, the majority of which is sold through the Chattogram auction market.
At the end of the first three quarters of FY23, National Tea's loss per share was Tk46.02, which was Tk31.12 a year ago.
