The cent percent export-oriented apparel manufacturer Beka Garments and Textiles, which planned to raise Tk35 crore from the market by going public, has backtracked on its initial public offering (IPO).
Officials at stock exchanges suspected that the company provided false information in its audited financial statement, especially regarding bank statements that had been submitted for the IPO.
The company, which has withdrawn its IPO application from the Bangladesh Securities and Exchange Commission (BSEC) and stock exchanges, has rejected the allegation outright.
Sanjoy Roy, chief financial officer (CFO) of the company, said, "It is our management's decision. In its last meeting, the Board of Directors decided to withdraw the IPO application."
"The management wants to overcome Covid-19's impact, strengthen its business and then re-apply for an IPO," he added.
The company, which was established in 2010, had wanted to issue 3.5 crore ordinary shares in the capital market.
It had earlier applied to the BSEC but failed to comply with the securities rules.
Of the IPO fund, the company had wanted to use Tk14.73 crore for the construction of its factory building expansion unit, Tk8.08 crore for plant and machinery acquisition, and Tk10 crore for repayment of bank loans.
The principal activities of the company include: import, export, manufacturing, printing, dyeing, washing, and embossing. It also trades: ready-made garments, knitwear, shirts, pants, and other apparel.
In the last fiscal year, the net profit of the company was Tk13.84 crore and its net sales stood at Tk160 crore.
In the first quarter of the current fiscal year, its net profit was Tk6.75 crore, and its earnings per share was Tk0.66.
During the period, its net sales were Tk53.90 crore and net asset value per share was Tk25.62.
Micky Diaz is the chairman of Beka Garments and Textiles Limited. He is also the managing director of Jane Trading Corporation, Diaz Spinning and Knitting Mills and JTC Solution Ltd.
The company's paid-up capital is Tk102 crore. Of its total shares, sponsors and directors hold 41.30% and placement shareholders 58.70%.
The company is using an average of 70% of its current production capacity.
To utilise its maximum capacity, it needs to invest in more advanced machinery and employ well-trained staff with sound technical knowledge of the production process.
Bangladesh is one of the largest producers of textiles and garment products. The ready-made garments industry occupies a unique position in Bangladesh's economy and is the biggest earning source of foreign currency.
Bangladesh exported garments worth $27.95 billion in the last fiscal year. Of these, knitwear garments were worth $13.91 billion and woven garments $14.04 billion.