Regent Textile Mills Ltd has called an additional general meeting to get approval from its shareholders to extend the time of utilisation of the initial public offering (IPO) fund again.
The company raised funds from the stock market in 2015 through the IPO. It has already extended the fund utilisation deadline four times from the securities regulator.
The additional general meeting will be held on August 27 this year. The company has set its record date on August 4 to ensure the presence of the shareholders at the meeting.
The investors are being deprived of real profit as the IPO fund has not been utilised for the development of the company, and the company's share price has dropped to rock bottom.
Earlier in 2015, it raised Tk125 crore for implementing balancing, modernisation, rehabilitation and expansion (BMRE), and for forming a new readymade garment (RMG) factory.
The company wanted to complete the BMRE in 12 months and the RMG project in 18 months but the initial deadline for doing so expired on December 19, 2016.
Regent Textile then extended the deadline for the first time to October 31, 2017, then for the second time to October 31, 2018, the third time to June 30, 2018, and the last time on June 30, 2019.
The company utilised Tk79.49 crore which is 64 percent of the total IPO fund within this period.
An officer of Regent Textile Mills, seeking anonymity, said the company is facing numerous challenges because of the present situation in the RMG sector caused by Covid-19 pandemic. It was not possible to implement the new RMG project in time for this reason.
Earlier, the company failed to implement the RMG project as there was a delay in fulfilling all the requirements of Accord Alliance, he added.
The Bangladesh Securities and Exchange Commission approved the IPO of Regent Textile in August 2015. General investors bought each share for Tk25 along with Tk15 premium at that time.
The Regent Textile paid five percent stock dividend to its investors last financial year ended on June 30, 2019.
In the 2018-19 financial year, the company's net profit was Tk11.79 crore, an over-12-percent reduction compared to the previous year's.
In the first half of the current financial year, the company's net profit dropped by 69 percent to Tk2.43 crore and earnings per share stood at Tk0.20.
The paid-up capital of the company is Tk127.33 crore. The sponsors and directors hold 54.55 percent shares of the company while institutional investors have 6.7 percent and general investors hold the rest.
On Sunday, the closing price of the company's each share stood at Tk7.80 at the Dhaka Stock Exchange.