BSEC panel auditor to look into Samin Food’s financials for merger
Besides, the company has also been asked to submit an audited report along with the draft scheme of its proposed merger with Samin Food
The Bangladesh Securities and Exchange Commission (BSEC) has instructed RN Spinning Mills, a concern of FAR Group, to have the financials of Samin Food and Beverage Industries and Textile Mills audited by someone from the BSEC panel of auditors.
Besides, the company has also been asked to submit an audited report along with the draft scheme of its proposed merger with Samin Food.
The BSEC has issued a letter to the company in this regard.
Earlier, RN Spinning Mills, a listed company, announced that it would merge with its non-listed sister concern, Samin Food, as it looks to return to production.
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The Cumilla-based spinner is out of production since a massive fire incident destroyed its factory in 2019. The company has not received insurance compensation yet.
According to RN's auditor, the factory and its assets were under the coverage of Tk132.46 crore. After the blaze, an inspection was conducted but no assessment report was filed.
Samin Food and Beverage Industries and Textile Mills started operations in the 2018-2019 fiscal year but it has no food and beverage business as yet.
The textile unit of the company currently can produce 79,848 spindles of cotton, viscose, and CVC yarn annually.
The board of directors of RN Spinning has decided to relocate its factory to the premises of Samin Food and Beverage at Gazipur, said FAR Group Manager Sudeep Banik.
He said they need time to relocate the factory of RN Spinning, but a merger can strengthen its business within a short time.
The merger scheme has been planned so that the listed company can begin production and generate profits for shareholders, he added.
He further said the company will prepare its draft merger scheme as per the law and regulatory requirements. The merger and amalgamation scheme, however, would depend on the approval of the court and the securities regulator, he continued.
The fatal fire accident sufferer RN Spinning was producing synthetic, and acrylic yarn. It raised Tk30 crore through an initial public offering (IPO) in 2010.
After two years of being listed, it raised an additional Tk278 crore by issuing the right shares to enhance production capacity through the installation of new machinery.
The company was in profit in 2016-2017 and 2017-2018 fiscal years. In the 2018-19 fiscal, it incurred a Tk607.11 crore loss due to the fire incident.
The firm continued to incur losses in the following years. In FY21, its cumulative loss stood at Tk446.68 crore.
