The Regent Textile Mills Ltd has completed the construction of its new unit after raising fund from the Initial Public Offering (IPO), which will raise its fabric production capacity by 233 percent (one lakh metre) per day.
Commercial production will start from the new unit from Sunday. The construction of the new unit cost Tk82 crore.
Anjan Kumar Bhattacharya, the chief financial officer of Regent Textile Mills, told The Business Standard, "We have not yet calculated how much the company will earn after the new production starts, because the earnings depend on orders from buyers. We are trying to receive large orders even amid the coronavirus pandemic."
The Bangladesh Securities and Exchange Commission (BSEC) approved the IPO of Regent Textile Mills Ltd in August 2015. General investors bought each share for Tk25 along with Tk15 premium at that time.
The company had raised Tk125 crore through IPO for implementing balancing, modernisation, rehabilitation and expansion (BMRE), and for buying a new ready-made garment (RMG) factory.
However, as per the IPO procedures, the company was supposed to purchase a Tk40 crore-ready-made garment factory which has not been done yet. The chief financial officer of the company said they were discussing purchasing a ready-made garment factory in an EPZ (export processing zone).
"Due to the fall in sale in the garment industry, the board of directors is yet to decide on purchasing a garment factory. Very soon, whether or not we will invest in the garment business will be discussed with the shareholders through a general meeting," he added.
A senior official of the company, seeking anonymity, said, "The board intended to invest in the shipping business instead of the garment sector. Some investment has already been made in the shipping business without the general shareholders' approval.
"However, the BSEC has opposed the move. So, we will seek shareholders' approval for investing in the shipping business."
Regent textile's financial performance
The Regent Textile Mills Ltd paid five percent stock dividend to its investors in the last financial year that ended on June 30, 2019.
In the 2018-19 financial year, the company's net profit was Tk11.79 crore, a reduction of 12.10 percent compared to the previous year.
In the first half of the current financial year, the company's net profit dropped 69 percent to Tk2.43 crore and earnings per share stood at Tk0.20.
The paid-up capital of the company is Tk127.33 crore. The sponsors and directors hold 54.55 percent shares of the company, while institutional investors have 6.7 percent and general investors hold the remaining 38.75 percent.
On Thursday, the closing price of the company's each share stood at Tk7.9 at the Dhaka Stock Exchange.