The struggling Emerald Oil Industries' production has remained suspended for more than six months for what the company said was a shortage of gas supply to its factory.
It communicated the matter to the Dhaka Stock Exchange on Thursday in response to a query.
It had made an announcement more than one and a half years ago that it would install a new husk boiler for capacity expansion. Now after such a long time it says it will resume operation after the installation of a husk boiler.
Meanwhile, investors drove up the stock price, having been hopeful about the company's promised growth.
Emerald Oil began production of its Spondon-branded rice-bran oil in 2011 and entered the stock market in 2014 by raising Tk 200 million.
The company had to suspend operations just three years after listing for a working capital shortage. A loan scam by founder Syed Hasibul Gani Galib and his subsequent fleeing from the country caused a suspension of the company's production from 2017 to 2021.
In 2021, Japanese company Minori's Bangladesh arm received the stock market regulator's nod to bring the company back into production by investing nearly Tk 315 million.
The Bangladesh Securities and Exchange Commission (BSEC) in 2021 restructured its board. The new board started commercial operation in January 2022 using a new husk boiler that helped expand refining capacity to 70 tonnes per day from 30 tonnes.
The company also held board meetings that remained pending for three years in June last year and approved audited financial statements for 2020, 2021 and 2022.
It returned to profit in FY22 after enduring losses for five straight years. It reported a profit of Tk 12.12 million for FY22. In FY23, the company made a profit of Tk 66 million.
Embroil Oil claimed to have earned a profit of Tk 152 million in the first half of FY24, up from Tk 37 million in the same period a year earlier. The company said it had utilized 75 per cent production capacity during the time, increased from 50 per cent in the same period of the previous year.
Paid-up capital expanded when equity turned negative
Upon regulatory approval, Emerald Oil Industries issued 31.5 million fresh shares in November last year at Tk 10 each against an investment of Tk 315 million of Minori Bangladesh.
With the new shares, the company's paid-up capital went up to Tk 912.7 million from Tk 597.1 million.
Before the company was allowed to increase its paid-up, it had a negative equity as huge as Tk 946 million as of FY23, according to the auditor. That means the company has more liabilities than assets.
Disclosures made to drive up stocks
As the new owner gave rise to optimism among shareholders, the stock price flew on the premier bourse from the start of 2023.
The stock jumped more than 6 times to Tk 182 per share in just five months through July last year, which analysts deemed unusual.
It then fell to Tk 66 each share in the next six months to January this year. The company's shares started to rise on the bourses once again after the news of fresh foreign investments that never came.
The stock traded at prices between Tk 18.6 and Tk 108.9 per share in the past one year.
When the stock started to climb up on the bourses and reached more than Tk 65 per share in April this year, Minori Bangladesh sold 4.66 million shares in two phases in the block market. By the time the lock-in period of the shares in the hands of Minori expired.
Following the latest earnings disclosure, the stock slid 8.12 per cent to close at Tk 24.9 per share on Thursday on the Dhaka Stock Exchange.
Emerald Oil is among the companies under investigation by the newly-formed securities regulator.
Company secretary Mohammad Jaidul Islam refused to make any comment over the phone.
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