The Posts and Telecommunications Division of the government wants the shares of Bangladesh Submarine Cable Company Limited (BSCCL) against the share money deposit at a 66% lower rate than the prevailing market price on the Dhaka bourse.
According to the company's Dhaka Stock Exchange (DSE) filing on Sunday, BSCCL will issue 2.21 crore shares against the government's share money deposit of Tk166 crore.
The shares will be issued at Tk75 apiece, including a premium of Tk65, as per a recent decision of the government. On Sunday, BSCCL shares closed at Tk218.9 each at the DSE.
Share money deposit is the money paid in exchange for shares that have not been acquired yet.
Azam Ali, managing director of the BSCCL, told The Business Standard, "The government has asked for shares at Tk75 each, and we accept that."
"Since the government has not taken any dividend or interest against this share money deposit for the last six years, we feel that the government has made a reasonable proposal."
"But if the shares are issued at this rate, the general shareholders will be somewhat deprived," he added.
He said the matter will be presented in the next annual general meeting (AGM) and the shareholders will take a decision there.
The company is going to issue the shares by following the directive of the Financial Reporting Council (FRC) issued in February 2020.
As per the directive, share money deposits must be converted into the company's capital within six months of receiving the money.
Also, the issue price of the shares against the share money deposit might be determined considering the last closing price on the stock exchanges.
The directive further said that the companies must include the share money deposits while calculating earnings per share and dividends as soon as the money is deposited, even before the securitisation.
In 2020, the BSCCL had appointed ICB Capital Management Ltd as issue manager to determine the share price.
The next year, the BSCCL proposed to issue 1.48 shares at Tk110.20 each, which was determined by the issue manager, to the government.
Currently, the company's paid-up capital is Tk164.90 crore and the government holds 73.84% shares of the company. Institutional investors have 15.57%, foreign investors 2.75% and general investors 7.84% shares.
For the fiscal 2022-23, the BSCCL recommended a record 51% cash dividend to its shareholders.
According to the company's disclosure, its revenue grew over 16% year-on-year to Tk515 crore in FY23, and net profit grew by 13% to Tk279 crore.
To secure shareholders' approval of the dividend and financial statement, the company has scheduled the AGM on 12 October.