Ring Shine Textile Limited (RSTL) will use IPO funds to repay loans it has taken from Premier Bank. The company repaid the loan taken from Woori Bank before it got the IPO funds from the capital market.
Ring Shine has collected Tk 150-crore funds from the country's share market through an Initial Public Offering (IPO) this year. It had declared that it will use this money to repay loans taken from Dhaka Bank and Woori Bank as well as for expanding its business.
The company had planned to repay Tk28 crore loans from Dhaka Bank and Tk22 crore from Woori Bank from the IPO funds. However, the loan from Woori Bank was repaid before the company withdrew the IPO fund from the capital market.
Ring Shine Textile's Secretary Asraf Ali told The Business Standard that the company will now use the money earmarked for Woori Bank to repay a loan taken from Premier Bank.
"The loan from Premier Bank will be repaid after we get approval from the Bangladesh Securities and Exchange Commission, the regulatory body of the capital market," he added.
Additionally, the company will use the IPO fund to procure and install machinery at a cost of Tk 96.40-crore for the existing factory in the Dhaka EPZ for production of denim.
State of the business
In the 2018-19 fiscal year, Ring Shine Textile Ltd's sales stood at Tk 982 crore, down 2 percent from that in the same period in the previous fiscal year. The company made a net profit of Tk 49 crore in the 2018-19 fiscal year, which is 11 percent lower than in the previous fiscal year.
In the 2018-19 fiscal year, the company paid 15 percent stock dividend to its shareholders.
The company sale was Tk 265 crore in the first three months of the current (2019-20) fiscal year. It made a profit of Tk 20 crore in this period.
Ring Shine Textiles started trading in the Dhaka Stock Exchange, the premier bourse of the country on December 12 this year.
On Sunday, the share price of Ring Shine Textile decreased by 5.50 percent. The closing price of the share was Tk 10.30.
The major activities of RSTL is manufacturing and marketing gray and finished fleece fabrics of various qualities, and dyed yarn for the ready-made garment industry of Bangladesh.
RSTL started commercial operation in August, 1998, and converted to a public limited company on June 8, 2017.