Envoy Textiles, an export-oriented denim manufacturer, has decided to raise Tk 870 million through issuing preference shares at par for expansion of a project.
Envoy Textiles will issue 87 million shares through a private placement to the potential investors at a face value of Tk 10 each, the company said in a filing with the Dhaka Stock Exchange (DSE) on Sunday.
Preference shares mean the shares in a company that are owned by investors who have the right to receive part of the company's profits before the holders of ordinary shares are paid.
The issuance of preference shares is subject to the approval of general members meeting, and approval from the Bangladesh Securities and Exchange Commission (BSEC), according to the filing.
The raised fund will be used to finance the upcoming project expansion for the production of blended yarn and to prepay a portion of high-cost borrowing, it said.
The said preference shares shall be fully redeemable cumulative non-convertible within five years.
The dividend will be paid semi-annually in arrear basis at the fixed rate, according to the filing.
Each share of the company, which was listed on the DSE in 2012, closed at Tk 47.80 on Sunday, losing 3.04 per cent over the previous day.
Its shares traded between Tk 21.20 and Tk 53.40 in the last one year.
The company has recommended 5.0 per cent final cash dividend (total 10 per cent cash dividend of the financial year ended on June 30, 2021 inclusive 5.0 per cent interim cash dividend, which has already been paid).
The company has reported earnings per share (EPS) of Tk 0.21 for July-September, 2021 as against Tk 0.13 for the same quarter last year.
In 2020, the company paid a 5.0 per cent cash dividend.
Earlier on May 5 this year, Envoy Textiles has decided to set up a spinning project expansion unit at its existing factory premises with an estimated total cost of Tk 1.76 billion.
The new expansion project will be set up at Jamirdia in Bhaluka, Mymensingh having a capacity of 3,710 metric tonnes cotton-polyester-spandex core-spun yarn productions per year.
The spinning expansion project is scheduled to be completed by July 2022, subject to a usual business and health environment condition.
The company's paid-up capital is Tk 1.67 billion, authorised capital is Tk 4.0 billion and the total number of securities is 167.73 million.
The sponsor-directors own 45.58 per cent stake in the company while the institutional investors own 47.62 per cent, foreign investors 0.06 per cent and the general public 6.74 per cent as of October 31, 2021, the DSE data show.
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