The losses of Ring Shine Textiles almost doubled in the six months through December last year as, it said, the ownership change led to chaos hampering sales.
The straggling textile company suffered losses amounting to Tk 705 million in July-December last year, up from a loss of Tk 380 million in the same period a year before.
As a result, the earnings per share (EPS) were Tk 1.41 in the negative for the period, according to a stock exchange filing on Tuesday.
"The company received fewer orders from foreign buyers, as it was in a chaotic situation owing to the ownership change," said Auniruddho Piaal, newly appointed managing director of Ring Shine.
Mr Piaal claimed the company could use only 3 per cent of the capacity during the time as foreign buyers were not confident enough to place orders.
Wise Star Textile and five Singaporean companies were supposed to acquire 190.03 million shares of Ring Shine at a negotiated price. However, the proposed deal was canceled in January this year for supposed failure to fulfill the terms of conditions.
While production was low, financial liabilities, servicing charge and overhead costs remained unchanged, which impacted financial performance, said Mr Piaal.
However, the management and the newly constituted board believe that business performance will get better in the coming days, he added.
"We are now getting fresh orders from foreign buyers after the termination of the ownership changes deal in January this year."
WHY RING SHINE Fell into TROUBLE
Ring Shine Textiles got listed in early December 2019. But after the listing, it could not do business properly due to numerous irregularities.
The company raised paid-up capital from Tk 99.50 million to Tk 2.85 billion by issuing pre-IPO shares, known as placement shares, to the then sponsors, directors, and 73 external local shareholders.
However, 11 sponsor- directors and 33 external shareholders did not make any payment against the allotted shares.
Ring Shine mainly manufactures dyed yarn and gray and finished fleece fabrics of various qualities for both local and international markets.
Working capital shortfall, a decline in orders from buyers, and raw material shortage led to the factory shutdown in September 2020.
The regulator restructured its board in January 2021, appointing seven independent directors to observe the company's overall condition and make a plan on how to salvage the company out of its misery.
In June 2021, the factory went back into production partially.
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