Dragon Sweater to merge with ‘sick’ company
The application for amalgamation is waiting for approval from the High Court
Stock exchange-listed Dragon Sweater and Spinning Limited has decided to amalgamate with its associate company Dragon Sweater BD Limited which is considered a "sick" company in the industry.
For shareholders' approval before placing the application to the High Court, the company has issued a notice regarding holding an Extra-Ordinary General Meeting (EGM), as per the requirement of the company law.
The EGM is scheduled to be held on 26 July and the record date is June 30. Shareholders whose names appear in the company register on the record date will be entitled to attend the EGM.
Both companies are concerns of Dragon Group whose chairman was Mostafa Golam Quddus, former president of the Bangladesh Garments Manufacturers and Exporters Association (BGMEA). Currently, his son Mostafa Quamrus Sobhan runs the business of the group.
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Dipak Kumar Saha, company secretary of Dragon Sweater, told The Business Standard that they are working on the amalgamation scheme. The details can be revealed after approval from the High Court.
According to the BGMEA data, Dragon Sweater BD started business in 1991 while Dragon Sweater and Spinning started its journey in 1999.
In September 2020, Dragon Sweater BD laid off about 500 workers without any pay or compensation. Workers took to the streets in front of the sweater factory in the capital's Malibagh, demanding pay and compensation. The situation calmed down after the government intervened and an assurance from the owner.
At the time, workers complained that the company had been firing staff without notice because of the recession. However, the company said that the workers were being laid off due to the relocation of the factory from Dhaka to Cumilla.
Earlier, in 2016, Dragon Sweater and Spinning Limited raised Tk40 crore by releasing four crore shares at Tk10 for a sweater factory to be set up in Cumilla.
A former official said that the work order of the sweater used to come in the name of Dragon Sweater and Spinning. And the sweaters were made in the factory of Dragon Sweater BD.
Meanwhile, after being listed on the stock exchange, Dragon Sweater and Spinning paid a maximum of 25% dividend to shareholders in 2018. The company paid a 10% dividend in the fiscal year 2020-21.
In the first nine months of the current financial year, the company's exports increased marginally to Tk113 crore and profit was Tk20 crore.
An official of the company said that the biggest progress of the company in the current financial year is to be completely debt-free. The company's loan of Tk12 crore has been repaid.
