The Bangladesh Securities and Exchange Commission (BSEC) has cleared the way for the Sonali Paper and Board Mills Ltd to return to the main trading board of the stock exchanges from over-the-counter (OTC) market.
The company is waiting for the approval of the board meetings of the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE).
In a letter to the company and the exchanges, dated November 27, the BSEC exempted the company from complying five different sections of listing regulations of both the bourses. It also exempted the company from complying two directives by the BSEC itself.
Among those, the post-listing minimum paid-up capital is most important.
The company's paid-up capital is yet to cross Tk15.13 crore, while according to listing regulations the paid-up capital has to be at least Tk30 crore while its shares are traded in the main trading board.
The other exemptions granted are mainly related to due diligence certificate during initial public offerings (IPOs).
As the company is merely coming back to the main market from the OTC instead of listing through a fresh public offer, the BSEC allowed them with the said exemptions.
Stock exchange sources confirmed The Business Standard that they have already received the BSEC letter about the Sonali Paper and are preparing accordingly to place the come-back proposal in upcoming board meetings.
"We have prepared necessary papers to submit to the stock exchanges," said the company's Secretary Rashedul Hossain.
The board meeting of the Sonali Paper will be held very soon and the board will take its next decision for trading the company shares in the main market, he added.
Sonali Paper's business
The company mainly produces white and printing papers besides liner papers, simplex papers, duplex papers, said the company secretary.
The Bashundhara Paper Mills, the Hakkani Pulp and Paper Mills, the Karnaphuli Paper Mills and the Magura Paper Mills are the main competitors in its business.
The demand for locally manufactured papers is increasing and the company is trying to cater to the demand for more sale and profits, said Rashedul Hossain.
This company produces different GSM white writing and printing papers in two units. A total of 454 employees are currently working for the company.
Currently, the company's production capacity is 45,000 kg per day and 35,000 tonnes per year.
The departure and comeback
The DSE launched its OTC in October 2009 with a total of 51 listed companies including the Sonali Paper and Board Mills.
The companies were ousted from the main board to the OTC 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.
At the second phase, another 29 companies were sent to the OTC.
And, later 12 companies managed to come back to the main market complying relevant rules and doing better in their business.
The Sonali Paper and Board Mills started its business in 1977 and the company got listed with the DSE in 1985.
After years of poor performance, the company was taken over by the local Younus Group in 2006. New directors have been trying to bring the business back on track and it took the company over a decade to see the light.
The company applied to come back to the main board on May 2011, but the application was rejected. The second and third applications too were rejected before it succeeded in the fourth attempt recently.
Now, the Sonali Paper and Board Mills has a reserve and surplus of TK488.14 crore and its paid-up capital is Tk15.13 crore.
The board of directors has recommended 10 percent stock dividend for the year ended on June 30, 2019.
At the same time, the earning per share of the company was Tk4.19 and the net asset value per share was Tk336.90.