BSEC allows Aman Cotton to discover IPO price - Share market analysis of dhaka stock exchange, Bangladesh

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13 September, 2017 10:11 AM Source: New Age

Bangladesh Securities and Exchange Commission on Tuesday allowed Aman Cotton Fibrous Limited to discover issue price of its shares under the book building method for raising Tk 80 crore from the capital market through an initial public offering.
The commission gave the approval at a meeting presided over by its chairman M Khairul Hossain on Tuesday.
With the participation of institutional investors, the selling price of the company’s share would be fixed through the bidding process.
Aman Cotton will use the IPO fund for buying machinery and equipments and to meet the IPO expenses.
As per the entity’s audited financial statements for the year ended on June 30, 2016, the company’s net asset value per share and weighted average earnings per share were Tk 31.89 and Tk 2.46 respectively.
ICB Capital Management is the issue manager of the company’s IPO.
Meanwhile, the commission at the meeting also accepted LankaBangla Finance’s review proposal on issuing right shares.
BSEC had earlier rejected the right offer of LankaBangla Finance worth of Tk 160 crore over non-compliance of a notification issued on November 22, 2011 and the company later applied for reviewing the decision.
As per the BSEC directive, sponsor-directors of a listed company have to hold 30 per cent shares of the company collectively and each director of an entity was asked to hold at least 2 per cent share of the entity and LankaBangla breached the compliance rules set by the commission.
The company later withdrew the directorship of the director who lacked 2 per cent of the total company’s shares and re-applied for the right offer which was accepted at the commission meeting on Tuesday.
The commission found that SSC Holdings Limited, a corporate sponsor of LankaBangla, holding 1.07 per cent shares despite being a director of the entity, had violated the BSEC directive.
Besides, the BSEC at the meeting also decided to form a special audit panel to probe Pacific Denim’s prospectus as the regulator suspected that the company had not used the fund raised through an IPO in line with it’s prospectus. The commission found some unusual activities by the company while using the IPO money.
The company got approval of raising fund worth of Tk 75 crore through the IPO in September, 2016.
The regulatory body at the meeting also allowed Phoenix Finance to float non-convertible Mudaraba subordinated bonds worth Tk 200 crore.
The face value of each unit of the bond will be Tk 50,00,000 and the bond will be fully redeemable in seven years and EBL Investment will work as the trustee for the bond. 

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