BSEC declines National Polymer's Tk100cr preference share issuance
The Bangladesh Securities and Exchange Commission (BSEC) has rejected National Polymer's application to raise Tk100 crore through the issuance of preference shares.
In a disclosure to the Dhaka Stock Exchange (DSE) today, the company stated that BSEC, in an official letter, declined to grant approval for the issuance of redeemable, cumulative, non-convertible, and non-participative preference shares amounting to Tk100 crore through a private offer.
Following the announcement, National Polymer's share price dropped by 1.90%, closing at Tk31.
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In April last year, the company's board had decided to issue the preference shares for five years to refinance existing loans. Shareholders approved the issuance in an extraordinary general meeting held on 23 June of the same year.
According to Investopedia, preference shares are hybrid securities that combine features of both debt and equity. While preference shareholders receive dividends before common stockholders, they do not have voting rights.
In its unaudited half-yearly financial statement (July-December) for FY25, National Polymer reported a long-term loan of Tk73 crore and a short-term loan of Tk284 crore. Due to high borrowing, the company incurred Tk24 crore in interest expenses, creating a significant financial burden amid unfavourable business conditions.
During this period, National Polymer's revenue dropped by 31% to Tk244.75 crore compared to the same period the previous year. Its net profit also plummeted by 62% to Tk2.78 crore.
The company attributed this decline to unavoidable circumstances, including political unrest and civil commotion across the country in July and August 2024, which severely reduced customer demand, adversely impacting overall revenue and profitability.
National Polymer paid a 10.5% cash dividend for FY24 after posting a net profit of Tk16.59 crore, an 8% increase from the previous year.
Earlier, in 2020, BSEC allowed the company to raise Tk55 crore through a rights offering, and in 2022, it approved the issuance of a Tk300 crore bond.
Listed on the capital market since 1993, the company is engaged in the production and sale of PVC pipes and fittings, doors, sheets, ceilings, as well as plastic household and furniture products.
As of the January shareholding report, the company's ownership structure comprises 33.03% held by sponsors and directors, 14.31% by institutional investors, and 52.66% by the general public.
