Younus Group acquires Perfume Chemical Industries

Infographics: TBS

With a plan to revive Perfume Chemical Industries Limited, Younus Group has acquired the once-listed company that has been languishing in the over-the-counter (OTC) market since 2009.

Mohammed Younus, managing director of the group, and his family members have already bought a 10.43% stake, equivalent to 95,965 shares, for Tk2.39 crore from the owners of the company, which has been non-functional since 2017.

Situated at the Bangladesh Small and Cottage Industries (BSCIC) industrial park in Kalurghat, Chattogram, Perfume Chemical used to produce the "Manola" brand cream and talcum powder, which were once very popular.

In February last year, the four sponsor-directors of Perfume Chemicals sold off their entire holdings at Tk250 per share, according to the Dhaka Stock Exchange (DSE).

However, the Bangladesh Securities and Exchange Commission (BSEC) allowed the company to issue 1 crore new shares at Tk10 each to existing shareholders to raise Tk10 crore, even before resuming its operations.

The regulator has also allowed Perfume Chemical to increase its paid-up capital to Tk19.20 crore from Tk9.20 crore at present.

Mohammad Ziaul Haque, chief financial officer (CFO) of the publicly listed Sonali Paper and Board Mills, who is also engaged in resuming the operation of Perfume Chemicals, told The Business Standard, "Acquiring the ownership, the new management has been planning to resume its operation."

"We hope after completing all the procedures, like renewing licences the company will return to operation under the new management," he added.

Earlier, Younus Group had bought Sonali Paper and Board Mills, a firm of the OTC market, and brought it back to the main board of the stock exchanges, and its shares are being traded on the board.

The OTC means the facilities provided by an exchange for the purpose of buying or selling unlisted or delisted securities from the stock exchanges.

The OTC market provides an alternative to stock exchange listing for securities of issuers that either choose not to be listed on the Dhaka Stock Exchange (DSE) or do not meet the relevant listing requirements.

The new owner formed five-member board

After acquiring the shares, Younus Group took control of the board of Perfume Chemical and formed a new five-member board. The new board includes Mohammed Younus as chairman, his son Rakibul Hasan as managing director, his wife Mahfuza Younus as director, and two independent directors.

Before purchasing the sponsor-director shares, the new owner split the shares' face value from Tk100 each to Tk10 each.

According to Younus Group officials, after splitting shares, the buying value of each share stood at Tk25.

A stock split is a corporate action in which a company issues additional shares to shareholders, increasing the total by the specified ratio based on the shares they held previously.

Companies often choose to split their stock to lower its trading price to a more comfortable range for most investors and to increase the liquidity of trading in its shares.

Officials at BSEC said Projapati Bangladesh was a prospective buyer of the company, including some individuals.

But despite being eager to acquire, Projapati Bangladesh later left its willingness to buy, and then the Younus Group alone bought the sponsor-directors shares.

Sponsor-directors sold off their entire holdings

According to the DSE, the four sponsor-directors of Perfume Chemical Industries sold off their entire holdings. Out of its total 9.20 lakh shares, sponsor-director shareholder Syed Ziad Raham sold 68,965 shares at Tk250 each.

The other three sponsors, Pervaz Uddin, sold 19,600 shares at Tk250 each, Shah Pervaiz sold 3,700 shares at Tk250 each, and Shahina Ziad sold 3,700 shares at Tk250 each.

The remaining shares are held by general and institutional shareholders of the company. Due to a lack of proper investment and diversification of its products, it lost market share to competitors and plunged into crisis. In 2017, it became fully non-operational.

According to sources from the BSEC, the company began reducing production in 2004 in line with falling demand for its products. Soon, the listed company failed to submit financial statements to the regulatory body. As the company's factory is in the BSCIC Industrial Estate, it owes more than Tk10 lakh in fees. The company did not pay any fees after the factory was completely shut down.

An official at BSCIC Chattogram, along with an officer from the new owner, spoke about the resumption of its operation. Perfume Chemical Industries, one of the pioneers in the chemical industry in Bangladesh, started as a partnership in 1972 and converted into a private limited company in 1974.

Later on, it was converted into a public limited company in 1991 and offered shares to the public with the approval of the stock market regulator in 1997.