BSB Cambrian Education to acquire Khan Brothers PP Woven Bags
The new owner will acquire the shares from the current board of directors at a negotiated value, and will ensure a seamless transition of responsibilities and control in the company
The management and operations of the publicly listed Khan Brothers PP Woven Bags Industries is set to be acquired by the BSB Cambrian Education Group, according to a disclosure of the company.
The new owner will acquire the shares from the current board of directors at a negotiated value, and will ensure a seamless transition of responsibilities and control in the company.
According to the disclosure published on the websites of stock exchanges on Thursday (19 September), the both buyer and seller signed a memorandum of understanding (MoU) on Wednesday at the company's registered office located at Malibagh Chowdhurypara in Dhaka.
The disclosure reads BSB Cambrian Education Group has voluntarily expressed its willingness to take over the management and operations of Khan Brothers PP Woven Bag Industries.
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"To formalise this the MoU has been duly executed and witnessed by authorised representatives of both the parties," it reads.
The disclosure, however, did not publish the value.
In the last 18 trading sessions till Thursday, its shares price jumped by 119% to Tk171.6 each, although the company has been incurring losses for years.
According to its annual report for fiscal year 2022-23, sponsor-directors held 30.13% stake of the company, the rest shares are held by institutional investors and the general public.
So, calculating the current shares price, the selling value of sponsor-directors stake will be more than Tk500 crore.
An official in the company seeking anonymity said the present owners have been facing various challenges to run the company.
"Now, the factory operation is running on a limited scale as it produces products on a sub-contracting basis. That is why, the present management decided to sell off their holdings to a new owner," he added.
Meanwhile, considering the unusual movement in price and volume of shares, the Bangladesh Securities and Exchange Commission (BSEC) on 15 September asked the Dhaka Stock Exchange (DSE) to investigate the trading of shares of Khan Brothers PP Woven Bags Industries.
In a letter to the country's premier bourse, the commission stated that it observed significant fluctuations in the price and volume of Khan Brother PP Woven Bags shares, which appeared unusual and suspicious.
"In light of this, you are instructed to investigate the trading of Khan Brother's shares during the recent period to identify the reasons (including market manipulation, insider trading, and other market abuses, if any) behind such unusual movement in price and volume," the letter said.
The DSE has been asked to submit an investigation report to the Surveillance Department of BSEC within 30 working days from the issuance of this letter.
Khan Brothers PP Woven Bag Industries was listed on the stock market in 2014, raising Tk20 crore to purchase machinery, construct buildings, and repay bank loans.
