The board of directors of Dragon Sweater and Spinning Ltd has decided to issue rights shares for mobilising more than Tk 881 million to expand the company's existing capacity.
The company will offer two rights shares for existing three shares at Tk 10 each, according to a disclosure on Wednesday.
The company's share price fell 9.36 per cent to close at Tk 18.40 each on the day, following the disclosure.
The offer for rights share is, however, subject to approval by the shareholders at an extraordinary general meeting (EGM) as well as Bangladesh Securities and Exchange Commission (BSEC) and other regulatory authorities.
The rights issue is an offer of new shares by a company to its existing shareholders in proportion to the shares they already hold, and usually at a discount than the market price.
The EGM is scheduled to be held on July 2 and record date for the EGM is on June 6. Another record date will be declared for issuance of rights shares after getting approval from the BSEC.
Listed with the stock exchanges in 2016, Dragon Sweater raised Tk 400 million through initial public offering (IPO) for importing machinery, civil construction of building, installation and transportation of spare parts, meeting the working capital requirement and IPO expenses.
The company's un-audited earnings per share (EPS) stood at Tk 0.66 for January-March 2018 as against Tk 0.16 for January-March 2017.
In nine months for July 2017-March 2018, EPS was Tk 1.75 as against Tk 1.04 for July 2016-March 2017.
The net operating cash flow per share (NOCFPS) was Tk 1.70 for July 2017-March 2018 as against Tk 0.39 for July 2016-March 2017.
The net asset value (NAV) per share was Tk 15.62 as on March 31, 2018 and Tk 13.67 as on June 30, 2017.
In 2017, the company disbursed 15 per cent stock dividend.
The sponsor-directors own 37.84 per cent stake in the company while institutional investors 24.19 per cent and general public 37.97 per cent as on April 30, 2018.
The company's paid-up capital is Tk 1.32 billion and authorised capital is Tk 1.50 billion and the total number of securities is 132.25 million.
Dragon Sweater is a 100 per cent export-oriented composite spinning and sweater manufacturing company. It converted into a public limited company in January 2012.
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