MJL Bangladesh to buy 2.20cr Prime Bank shares within 30 days

Lubricant producer MJL Bangladesh Ltd has announced that it will acquire 2.20 crore or 1.942% shares of Prime Bank at the prevailing market rate through the block market on the Dhaka Stock Exchange (DSE) within the next 30 days.

According to a disclosure published on the DSE on Wednesday (17 April), as per the prevailing market price, the value of the shares that MJL intends to buy is Tk48.40 crore.

Prime Bank shares closed at Tk22 each at the DSE yesterday.

MJL Bangladesh Managing Director Azam J Chowdhury is also a director of Prime Bank, representing East Coast Shipping Lines, which holds a 2% stake in the bank.

Azam J Chowdhury himself holds 3.16 crore shares in the bank while his son Tanjil Chowdhury representing EC Holdings Limited now serves as the bank's chairman. 

MJL believes this is a lucrative opportunity to invest in the bank shares at the current price, said MJL Bangladesh Managing Director Azam J Chowdhury.

In the declining stock market nowadays, many large corporations including Square Pharmaceuticals, were looking for rock-solid equity investments in different sectors and the MJL move was not an exception, he added.

Financials of MJL

In the 2022-23 fiscal year, the net revenue of MJL Bangladesh grew 25% year-on-year to Tk3,071 crore, and net profit by 46% to Tk276 crore.

The company paid a 50% cash dividend to shareholders for FY23.

According to the company's unaudited financial statement for the July-December quarter of the current fiscal year, its revenue grew 24% year-on-year to Tk1,911 crore, and net profit by 40% to Tk167 crore.

MJL Bangladesh is a joint venture company of EC Securities Limited, a subsidiary of East Coast Group, and the state-owned Jamuna Oil Company.

Its journey of blending world-class lubricants in Bangladesh started in 1998 when Mobil Corporation, later known as Exxon Mobil Corporation, decided to set up Mobil Jamuna Lubricants Limited in partnership with Jamuna Oil.

The company's self-operated core business of Mobil and Omera-branded lubricants and shipping, the liquefied petroleum gas (LPG) cylinder manufacturing business operated by a subsidiary.

MJL Bangladesh entered the stock market in 2011.

East Coast Group owns more than half of the firm, while Jamuna Oil holds nearly one-fifth of the company's shares.

Financials of Prime Bank

Prime Bank has recommended a 17.5% cash dividend to its shareholders for the year 2023. This dividend declaration is in line with the bank's commitment to sustainable financial performance and returns to its shareholders, according to a statement issued by the bank on 15 April.

As per the audited financial statement, the banking company's consolidated net profit after tax stood at Tk480 crore, which was Tk399 crore a year ago.

Its earnings per share stood at Tk4.24, reflecting a 20% growth from the previous year.

Meanwhile, Union Capital Limited, a non-banking financial institution (NBFI), might be merging with Prime Bank soon.

The final decision is yet pending, Tanjil Chowdhury told The Business Standard earlier in February.

He said, "We want to bring the NBFI [Union Capital] out of loss through business sharing. I believe that the organisation will return to its previous position within a year by providing advisory and technical support."

Prime Bank has decided to merge with Union Capital on the advice of the Bangladesh Bank, he added