Chinese firm DEX-I to take over closed Mithun Knitting
According to conditions set by the BSEC, the takeover has to be completed within a month
The Bangladesh Securities and Exchange Commission (BSEC) has cleared the way for the acquisition of Mithun Knitting and Dyeing, now known as Toyo Knitex (CEPZ) Limited, by Destination Express International DEX-I Limited, a China-based courier company.
The regulator last week approved the transfer of 5,449,058 shares, held by the legal heirs of the company's original owner, late Md Mozammel Haque, a former lawmaker, to the Chinese company.
According to conditions set by the BSEC, the takeover has to be completed within a month.
Since September 2019, Mithun Knitting's factory in the Chattogram Export Processing Zone (CEPZ) has remained shut down.
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Its lease was terminated by the zone authorities in February 2019 due to unpaid dues of nearly Tk20 to several institutions, including the BEPZA, after it failed to comply with the safety reforms required by the Accord.
The safety compliance failure resulted in a blacklisting by the foreign buyers, who stopped placing orders at the factory.
To recover some of the outstanding debts, including workers' wages, the BEPZA auctioned off the factory's assets.
A BSEC official seeking anonymity said, "The company now exists only on paper with no remaining assets. It risks delisting from the stock market if no new investments are made."
Mozammel's legal heirs are Rabeya Khatun, Md Rafiqul Haque, Md Mahbub-Ul-Haque, Md Atikul Haque, Md Rabiul Haque, Syeda Hasina Haque, Mahbuba Haque, Mahmuda Haque, Mahfuza Haque, and Monsura Haque.
For the takeover, the new owner has to maintain at least a 30% shareholding in the company and will be responsible for repaying the BASIC Bank loan, which initially was Tk 3 crore but has now grown to nearly Tk 5 crore.
They have to pay the penalties, if any, imposed by the BSEC as well.
With the news of the acquisition, the company's share price jumped by 73% to Tk 32.70 in 15 trading days from Tk 18.90 on 2 May, with a closing price of Tk 31.80 on Thursday. The company was listed on the stock market in 1994.
Dex-I Limited is well-known for its courier service within China, particularly for the garment industry. It has a strategic partnership with a world-renowned logistics conglomerate.
As of 30 April 2024, sponsor directors retain a 17.20% stake in Mithun Knitting, institutional investors 15.49%, foreign investors 0.16% and general shareholders hold 67.15% shares.
