Savar Refractories seeks to delist, directors to buy each share at Tk84

Company overview:

• Incorporated in 1982
• Listed in share market in 1988
• Incurring losses since FY14
• Failed to hold AGM since FY17
• Last trading share price was Tk261.1 each
• Home Minister's family members operate the company
• Tk18.71cr asset value after revaluation
• Total liabilities stood at Tk7.49cr

Brick maker Savar Refractories Limited is seeking to delist itself from the Dhaka Stock Exchange (DSE), and to execute the plan, its sponsors and directors will offer stock investors Tk84 per share on the basis of net asset value to buy their holdings.

The company now requires approval from the Bangladesh Securities and Exchange Commission (BSEC) to carry out the plan chalked out by its board on Wednesday evening.

Currently, Home Minister Asaduzzaman Khan's wife Lutful Tahmina Khan, his son Safi Modassir Khan, and daughter Shafia Tasnim Khan are serving the company as its chairman, managing director, and director respectively.

In a stock exchange filing, the company said it has done a revaluation of its assets for the purpose of delisting. In this, the asset value of the company increased from Tk4 crore to Tk18.71 crore.

According to company sources, net asset value will be calculated by deducting liabilities from the revaluation asset value. And the net asset value per share will be calculated by dividing this asset value by the total number of shares. Sponsors and directors of the company will buy shares from general shareholders at this rate.

A senior executive of the company told The Business Standard on condition of anonymity, that the company has been incurring losses for a long time. Also, its production and business conditions are not good. So, the board has decided to delist the company from the stock market.

He added that the company will apply to the stock exchange for suspending trade from the secondary market.

A source at the company said its paid-up capital is Tk1.39 crore and the number of shares is 1.39 lakh. As of 31 March this year, its total liabilities including bank loans were Tk7.49 crore. After deducting the liabilities, its revaluated net asset value per share will be Tk84.

On Thursday, its shares closed at Tk261.1 each on the country's premier bourse.

A market insider said, if the company's sponsors and directors buy shares at net asset value per share price, the general investors will suffer a loss of two-thirds of their investment value.

According to the DSE, out of the total shares of Savar Refractories, sponsors and directors hold 50.68%, institutional investors 7.18% and the general public 42.14%.

The auditor of the company said in its audit report for fiscal 2020-21, that Savar Refractories has been incurring losses since fiscal 2013-14 and failed to hold annual general meetings from fiscal 2016-17.

Currently, the company is facing a working capital shortage and, due to the low demand for its products, the company runs at a nominal capacity.

Earlier, Beximco Synthetics' sponsors and directors applied to the regulator to buy its shares to delist the company from the stock exchange. The regulator also approved them to buy its public holding at its face value of Tk10 each. But the buying process is still going on.