Publicly listed Legacy Footwear, which had borrowed Tk31.59 crore from Rupali Bank, has secured a waiver of Tk19.93 crore of that loan.
The manufacturer of leather shoes will now have to pay only Tk11.66 crore for the final settlement of the entire loan.
According to officials at Legacy Footwear, the remaining amount will be paid from the fund that will be raised through the issuance of new ordinary shares to increase the company's paid-up capital.
Md Abdul Baten Bhuiyan, company secretary at Legacy Footwear told the Business Standard, "We got a loan waiver from the bank. Now, we will have to pay only the remaining amount."
In April this year, the Bangladesh Securities and Exchange Commission (BSEC) had allowed Legacy Footwear to raise Tk30 crore to increase the paid-up capital.
As per decision, the new shares will be issued at a face value of Tk10 each to its directors, other than existing shareholders, against cash consideration through private placement.
The company has decided to repay loans and meet working capital requirements with the fund.
Currently, the company's paid-up capital is Tk13.08 crore, which will reach Tk43.08 crore after the issuance of the new shares.
As a result, the company will be able to comply with the BSEC's requirement of maintaining minimum Tk30 crore paid-up capital.
Legacy Footwear had incurred a loss of Tk1.12 crore in the 2021-22 fiscal year, and failed to pay dividends to its shareholders for that year.
Declining exports of its products and electricity disruptions in the country in the past few months have caused the firm to turn a big loss during the period.
In the first nine months of the fiscal 2022-23, the company had also incurred a loss of Tk1.77 crore.
Legacy Footwear started its business in 1996 as a 100% export-oriented company, but it could not establish itself in the export market.
It got listed on the Dhaka Stock Exchange in 2000. On Tuesday, its shares traded at Tk126.8 each.