The Board of Directors of the publicly listed Regent Textile Mills Ltd has decided to use its Initial Public Offering (IPO) fund to acquire 99% shares of its own entity, Legacy Fashion Limited, as a new RMG project.
Both the companies are concerns of Habib Group.
Regent Textile Mills will buy Legacy Fashion at Tk83.01 crore, stated the disclosure of Regent Textile Mills on the Dhaka Stock Exchange (DSE) website on Tuesday.
Of the amount, Regent will invest Tk80 crore from its IPO fund that was approved by the general shareholders during the Extraordinary General Meeting (EGM) held on 27 August this year, the disclosure added.
The company will invest the remaining amount from other sources.
The Bangladesh Securities and Exchange Commission approved the IPO of Regent Textile Mills in August 2015.
The company had raised Tk125 crore through IPO to implement Balancing, Modernisation, Rehabilitation and Expansion (BMRE) project, and to buy a new RMG factory.
But instead of buying a new RMG factory from any other entity, Regent is using its IPO fund to buy its own entity after five years of going public.
Earlier, Regent Textile Mills had extended its IPO utilisation deadline five times from the securities regulator.
Meanwhile, Regent has already started commercial operation of its new BMRE project, which will raise its fabric production capacity by 1 lakh metre per day. The cost of the project was Tk82 crore.
Regent Textile Mills has posted a yearly turnover of more than Tk300 crore for the last three years.
It paid a 5% stock dividend to its shareholders for the financial year ending on 30 June 2019.
In the 2018-19 financial year, the company's net profit was Tk11.79 crore, which was 12.10% less compared to the previous year.
In the first nine months of the last financial year (July to March 2020), earnings per shares of the company was Tk0.34, compared to Tk0.86 in the same period of the previous year.
The company's paid-up capital is Tk127.33 crore.
Sponsors and directors jointly hold 54.55% shares, institutional investors 7.51%, and general investors hold the remaining 37.94%.
On Tuesday, the closing price per share of the company stood at Tk10.6 at the DSE.
Regent Textile Mills Limited was established in 2006. It is a 100% export-oriented textile mill for high-quality woven fabrics and home furnishing items. Its factory is located at Kalurghat, Chattogram.