Bourses to resume trading of Sonali Paper on Sunday

After languishing in the smaller over-the-counter (OTC) market for 11 years, the shares of small-cap Sonali Paper and Board Mills will resume trading on the mainboards of the stock exchanges on Sunday. 

Officials said both the Dhaka and Chattogram bourses are ready to restart the trading as they do not need extra preparation for this. 

The stock market regulator had earlier allowed resuming trading of the company's shares on the main boards.

It said the whole shares of existing directors of the company will be subject to one year "lock-in" from the first day of trading on the main boards.

The Bangladesh Securities and Exchange Commission (BSEC) had earlier scrutinised the vetted documents and the latest financial statements of Sonali Paper. 

On July 2 this year, Sonali Paper and Board Mills got relisted on the main boards.

Both exchanges in their board meetings had approved the relisting of the company from the OTC market to the main boards.

The DSE launched its OTC market in October 2009 with 51 poorly performing listed companies, including Sonali Paper and Board Mills. 

In the first nine months of last fiscal year, Sonali's net profit was Tk3.46 crore, down from Tk5.23 crore, and earnings per share was Tk2.29, down from Tk3.46 in the same period of the previous year.

In the January-March quarter, its net profit was Tk0.53 crore and the earnings per share was Tk0.35.

The company's net asset value per share was Tk778.86 as of March 31 this year.

In November last year, the BSEC exempted Sonali Paper from having to comply with several rules.

However, both the stock exchanges rejected the regulator's approval to allow Sonali's shares to be traded on the main market as the low-profile company did not have positive net current assets in the last three financial years.

On top of that, the company's paid-up capital was below Tk30 crore – a condition for getting listed on the bourses.

Despite the refusal, the stock market regulator has once again allowed the company to come back to the main market.

Sonali Paper mainly produces white and printing paper, liner paper, simplex paper, and duplex paper. Its main competitors are Bashundhara Paper Mills, Hakkani Pulp and Paper Mills, Karnaphuli Paper Mills and Magura Paper Mills.

Sonali Paper is trying to cater to the rising demand for locally manufactured paper. At present, the company's production capacity is 45,000kg per day and 35,000 tonnes per year.

The company started its business in 1977 and got listed on the DSE in 1985. In 2006, Younus Group took over Sonali Paper after years of poor performance.

Sonali was ousted, along with other companies, in 2009 from the main boards to the OTC market because of underperformance or nonperformance in business, failure to hold shareholders' annual general meeting for years, and converting own shares into electronic ones instead of paper certificates.

Since then, the new directors have been trying to bring the business back on track.

The company now has a reserve and surplus of Tk488.14 crore, and its paid-up capital is Tk15.13 crore.