The Bangladesh Securities and Exchange Commission (BSEC) has given approval to Beximco Synthetics Ltd to buy its ordinary shares back from general shareholders at a face value of Tk10 each.
In September last year, the company's board of directors decided to wind-up the company and delist it from the stock exchanges.
As per BSEC directives regarding the company's exit from the bourses, its shares have been suspended in the stock market since 8 September last year.
Currently, general shareholders, including institutional and foreign investors, hold 55,778,623 shares of Beximco Synthetics.
BSEC sources said now the company has no bar to buying its shares back from general investors.
Company officials say they will declare a detailed stock buyback plan on the websites of the stock exchanges.
The company has been incurring losses since 2013 and has failed to provide any dividends to shareholders since then.
Beximco Synthetics was incorporated in 1990 with the Registrar of Joint Stock Companies and Firms (RJSC) as a public limited company.
It was mainly engaged in the production and sales of Drawn Texturised Yarn (DTY), a type of polyester yarn.
It was listed with the stock exchanges in 1993, and launched manufacturing operations in 1994.
In the company's annual report for fiscal 2020-21, its Chairman, ASF Rahman, said there has been a sizable demand for DTY since the inception of the company. It made good profits and regularly declared dividends for 18 years till 2013 without any interruption.
But from 2013 onwards, it could not declare any dividends because the company's business was repeatedly hampered by the government reducing import duties on DTY.
"Cheap foreign DTY took over the market and made the production of this type of yarn in Bangladesh unviable," he added.
The company could not maintain its targeted production and profitability, and eventually fell into losses.
Shares of the company traded below face value for a number of years. Soon the company was forced to cease production and close down its plant.
As per rules, the company retrenched most of its employees after clearing all their dues, according to its Chairman, ASF Rahman.
Source : tbsnews
Midway News Team
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