Non-listed Kapita Packaging Solutions has finally completed acquiring stakes of Yeakin Polymer's sponsor-directors nearly two years after receiving regulatory approval.
It purchased more than 22.19 million shares constituting a 30.52 per cent stake in Yeakin Polymer outside the trading system of the Dhaka exchange at a negotiated price of Tk 10 each, as per the Sales and Purchase Agreement (SPA).
Kapita Packaging, the new owner of Yeakin Polymer, has appointed Chaklader Rezaunul Alam as chairman and Mohammad Harunor Rashid as managing director of the latter, according to a stock exchange filing on Thursday.
In May 2022, the Bangladesh Securities and Exchange Commission (BSEC) gave permission to Kapita Packaging to take over Yeakin Polymer, which has been in a dire strait since 2018.
As per the regulatory approval, the shareholders must have completed the transfer of ownership within 30 days. But the company failed to sell the holdings of sponsor-directors to Kapita Packaging until now for various complications.
One of the challenges was to get a no-objection certificate from the lenders, said an official of Yeakin Polymer preferring anonymity.
Now, Yeakin Polymer is expected to return to full-scale production since one of the conditions attached to the ownership transfer requires the new owner to ensure resumption of production within two months after acquisition.
Yeakin Polymer's business collapsed just two years after it had raised Tk 200 million through an initial public offering (IPO) in September 2016.
Until 2019, the company reported revenue and profit growth. The business sank into the red just before the pandemic began. Then Yeakin Polymer defaulted on loans from Islami Bank Bangladesh, according to its auditor.
The company said the production had been reduced significantly due to a shortage of working capital.
The Satkhira-based company started commercial operation in 2003 to manufacture and market polypropylene woven bags. Its products included bulk bags, coal-carrying bags, animal and aqua feed bags, chemical and fertilizer bags, and food grain and reusable shopping bags.
The company paid cash dividends only once since listing in 2016. It was downgraded to the "Z" category in February this year.
In FY21, the company suffered a loss of Tk 40.33 million. It also incurred a loss of Tk 36 million in July-December 2022. After that no financial results were published.
Following Thursday's disclosure, the stock fell 2.6 per cent to Tk 22.6 per share on the Dhaka Stock Exchange.
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