DSE approves relisting of Sonali Paper

The Dhaka Stock Exchange (DSE) in its board meeting recently decided to allow Sonali Paper and Board Mills Ltd to relist on the bourse after almost 10 years of trading in the over-the-counter (OTC) market.

The exchange has already instructed its management to set a date for trading of the company's shares in the main market.

"In the last meeting, our board of directors allowed the company to relist in the main market," DSE Managing Director Kazi Sanaul Hoq told The Business Standard. "We want to relist the company very soon."

However, the Chittagong Stock Exchange (CSE) has yet to approve relisting as the bourse could not arrange a board meeting during the Covid-19 pandemic.

An official of the port city bourse said the matter of relisting Sonali Paper would be raised in the next meeting whenever they were able to hold it.

In November last year, the Bangladesh Securities and Exchange Commission (BSEC) exempted Sonali Paper from having to comply with several rules.

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

Moreover, the company's paid-up capital was below Tk30 crore – a condition that has to be met to get listed on the bourses.

Despite the refusal, however, the securities regulator again allowed the company to come back to the main market.

Sonali 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 is trying to cater to the rising demand for locally manufactured paper. At present, the company's production capacity is 45,000 kg 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 after years of poor performance.

Sonali was ousted, along with other companies, in 2009 from the main board to the OTC market because of underperformance or nonperformance in business, failure to hold shareholders' annual general meeting over 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.

Last year, the Sonali Paper's board of directors recommended a 10 percent stock dividend for its shareholders, when its earnings per share were Tk4.19, and net asset value per share was Tk336.90.