The Bangladesh Securities and Exchange Commission (BSEC) last Wednesday imposed new conditions on issuance of capital, right shares, use of IPO funds and sale of shares transferred by sponsors and directors of listed companies.
The Bangladesh Securities and Exchange Commission (BSEC) took a number of decisions at a meeting held at its office on the day.
According to a BSEC decision, from now on no listed company will be allowed to utilise more than one-third of the fund it would raise through initial public offering (IPO) for the purpose of loan repayment.
"No issuer of a listed security shall take decision to issue rights shares within two years from the date of publication of prospectus for IPO and before full utilisation of the fund raised through IPO, previous rights issue or re-peat public offer (RPO)," the BSEC said.
The OTC (over-the-counter) market issues, if allowed fresh listing, will not be entitled to issue rights shares before completing three financial years from the date of fresh listing.
As per fresh conditions, a 3-year lock-in will be imposed on the shares transferred by the existing sponsors or directors to any person, other than existing shareholders. This condition will be applicable in the case of shares transferred within 12 preceding months from the date of submission of application for capital raising or public offering.
It was also decided that all money received against allotment of shares or in the form of share money deposit will have to be deposited in a separate bank account.
According to another condition, no company and/or its sponsors, directors, employees or appointed agents will collect money from any person other than existing shareholders for subscribing shares of the company, before obtaining consent for raising capital from the securities regulator complying applicable securities rules.
The securities regulator at the meeting approved the IPO proposal of Zaheen Spinning which will raise a fund worth Tk 120.00 million by offloading 12 million shares at an offer price of ten taka each.
According to the financial statement for the year ended on June 30, 2014, the company's earning per share (EPS) and net asset value (NAV) are Tk 1.01 and Tk 12.59 respectively.
As per BSEC approval, First Security Islami Bank will issue one rights share against two existing shares at an offer price of ten taka each.
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