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Bashundhara Paper installs new tissue machine

Share price drops 0.88pc despite the news

FE Report | February 12, 2019 00:00:00

The Bashundhara Paper Mills has set up a new European brand automated tissue machine using the IPO fund, its board of directors has announced.

Bashundhara Paper Mills, a concern of the country's leading business conglomerate Bashundhara Group, raised a capital of Tk 2.0 billion by floating more than 26 million ordinary shares under the book-building method last year.

The company earlier said the initial public offering (IPO) fund was being used for purchasing machinery worth about Tk 1.35 billion, repay bank loans of about Tk 600 million and bear the IPO expenses of about Tk 50 million.

The company has also informed that they have utilised 100 per cent of its IPO fund and successfully implemented the new set-up of its European brand automated tissue machine, according to a disclosure posted on the Dhaka Stock Exchange (DSE) website on Monday.

The machine will increase tissue manufacturing capacity by 30,000 MT per year and add diversities in the product portfolio, the disclosure said.

"Commercial production has already started after successful trial production," it added.

This new set-up is expected to bring about Tk 4.0 billion in revenue and Tk 360 million in profit after tax per year at optimum utilisation level, said the disclosure.

The company also noted that before installing this machine, Bashundhara Paper Mills had a tissue and paper manufacturing capacity of 113,050 MT per year.

Each share of the company, which made its trading debut on July 02, 2018, closed at Tk 78.20 on Monday, losing 0.88 per cent over the previous day despite the news.

Its share traded between Tk 78 and Tk 190.50 since it was listed with the DSE on July 02, 2018.

The company's earnings per share (EPS) stood at Tk 1.32 for July-December period of 2018 as against Tk 1.02 for the same period of 2017.

The company disbursed 20 per cent cash dividend for the year ended on June 30, 2018.

The company's paid-up capital is Tk 1.73 billion and authorised capital is Tk 5.0 billion, while the total number of securities is 173.79 million.

The sponsor-directors own 70.86 per cent stake in the company, while institutional investors own 6.51 per cent, foreign investors 0.01 per cent and the general public 22.62 per cent as on January 31, 2019, the DSE data shows.

The Bashundhara Paper Mills produces different types of paper such as writing and printing paper, white printing paper, photocopy and sanitary paper, multipurpose paper, colour printing paper, ledger printing paper and bidi paper.

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