Esquire Knit plans to issue preference shares worth Tk100cr
Esquire Knit Composite Ltd intends to issue preference shares worth Tk100 crore in order to expand production capacity and cut financial costs.
The export-oriented company will purchase machinery for Tk65 crore and repay the loan of Tk35 crore.
It will issue 10 crore preference shares at a face value of Tk10 each subject to the approval of its shareholders and the Bangladesh Securities and Exchange Commission (BSEC).
To get approval from shareholders, the company will hold an annual general meeting on 25 January this year.
Keep updated, follow The Business Standard's Google news channel
Preference shares are temporary shares of a company that pay a fixed annual return, but investors do not have voting rights.
The shares are called preference shares because investors holding the instruments get preference over common shareholders of the company when it comes to dividend disbursement and paying back the principal amount.
According to the disclosure, the nature of the preference shares will be fully redeemable, non-convertible, and cumulative. The dividend will be paid for the preference shares semi-annually.
Besides, the redemptions of the preference shares will be made semi-annually, commencing after 18 months from the first date of issuance.
Esquire Knit Composite Ltd, which produces different types of knit garments and sells them to foreign buyers, raised Tk150 crore from the capital market in 2019.
It will also be renamed as Esquire Knit Composite PLC, which requires approval for the amendment to the relevant clauses of the company's memorandum and articles of association.
Seeking anonymity, an official of the company said it has built a large, multi-storey building using the initial public offering fund. Now it needs machinery to go into operation.
Besides, the company wants to repay a high-cost loan, which will reduce finance costs, he added.
From July to September 2022, the revenue of the company stood at Tk177.84 crore, which was Tk266.19 crore in the same period of the previous year.
During the period, its net profit was Tk1.26 crore, which was Tk9.28 core one year ago.
Its earnings per share were Tk0.09 and its net asset value per share was Tk65.30 with revaluation.
Sponsors and directors jointly hold 46.95% of the company's shares, while institutions and general investors own 39.67% and 13.38%, respectively.
The last trading price of the company's shares at the DSE was Tk34.50 each on Wednesday.
