The Bangladesh Securities and Exchange Commission (BSEC) has permitted Oimex Electrode Limited to issue 60 lakh fresh shares for its existing directors in order to increase the company's paid-up capital.
Currently, the company's paid-up capital is Tk67.09 crore. The shares will be issued at Tk10 each against a share money deposit. Share money deposit is the money paid in exchange for shares that have not been acquired yet.
Oimex Electrode shares last closed at Tk19.8 apiece on the Dhaka Stock Exchange (DSE).
The company had applied to the BSEC to raise paid-up capital by Tk6 crore through the issuance of new shares for its current directors. The commission issued a letter of intent for the company in this regard last week, said an official at Oimex Electrode.
The company is currently running at 80% of its normal capacity, the official said.
"In September, it sold products worth nearly Tk8 crore. The management expects the capacity to grow gradually."
The new management already invested around Tk35 crore in the company as working capital and others. It has also created a proper product distribution channel, he added.
Oimex Electrode manufactures welding electrodes, galvanised iron wires, copper-coated welding wires, and iron nails.
In May last year, SS Steel entrepreneurs acquired 30% of Oimex shares held by its sponsor-directors at a face value of Tk10 each, effectively taking over the company.
The BSEC had approved the share transfer deal as it apparently helped run the company better.
Oimex Electrode, with its head office in Dhaka and factory in Kushtia, went public in 2017, with Tk15 crore in equity.
Utilising its funds collected from investors, the company expanded its manufacturing, and research and development capacity.
However, marketing and management weaknesses prevailed as its main market was mostly limited to the North and South-western parts of the country.
It was posting growth in revenue and net profits till 2019 and started seeing a decline since then.
In the January to March quarter of the fiscal 2022-23, its net loss reduced to Tk1.21 crore from Tk2.68 crore in the same period previous fiscal.
As of 31 August 2023, sponsors and directors jointly held 30.01%, institutions 30.30%, and general investors 39.69% of the company shares.