Usmania Glass to issue shares to BCIC against loans

Usmania Glass Sheet Factory – a pioneer in the country's glass industry – wants to issue shares to the Bangladesh Chemical Industries Corporation (BCIC) against loans amounting to Tk18.77 crore.

This way, the company will be able to comply with the regulatory requirement of fulfilling the minimum paid-up capital requirement of Tk30 crore. 

Recently, the company has applied to the Bangladesh Securities and Exchange Commission (BSEC) for regulatory opinion in this regard.

The BCIC has also approved this decision of the company.

An official of the company said on  anonymity, "We have no other option to increase paid-up capital to comply with the regulatory rule, as the company has been incurring losses consecutively."

The company will take the next step if the regulator approves the decision, he added. 

Usmania Glass Sheet Factory started operating as a business in Chattogram before the independence of Bangladesh in 1959.

It was the country's first glass manufacturing industry which had an aim to meet local demand at an affordable price.

With the rise of the private sector in the glass industry after the country's independence, Usmania Glass Sheet Factory gradually lost its market share.

An official said the company is now over 60 years old and most of the machinery is outdated. It has failed to meet production targets and the old machinery is creating a burden with high production costs.

As a result, the company has been incurring huge losses and the demand for its products has been declining.

According to its financials, the company last made a profit of Tk3.91 crore in fiscal 2013-14.

Since then, it has incurred losses for eight years up to fiscal 2020-21.

Its container glasses are widely used in food and beverage packaging, pharmaceuticals, laboratories, and hygiene sectors in both local and foreign markets, says the company.

Khan Wahab Shafique Rahman and Co – chartered accountants of the company – said the production technology of Usmania Glass has become outdated compared to its peers in the industry.

For that, its production cost has exceeded selling price, resulting in operating losses for a few years including the current fiscal year. The accumulated loss of the company has reached Tk59.63 crore.

As of 30 June, this year, tsponsor-directors held 2%, the government 51%, institutional investors 14.10%, and general investors 32.90% shares of the company.

Its last trading share price was Tk76.40 each at the Dhaka Stock Exchange on Sunday.