Ring Shine Textiles needs Tk30cr to stay afloat
Performing poorly, Ring Shine Textiles Ltd wants to use another Tk30 crore of its initial public offering (IPO) funds to run the business.
The textile manufacturer has already applied to the Bangladesh Securities and Exchange Commission (BSEC) for its approval.
It has utilised Tk90 crore of its Tk150 crore in IPO funds, raised upon listing on the stock exchanges in 2019.
Keep updated, follow The Business Standard's Google news channel
The company spent Tk50 crore on debt servicing and Tk40 crore on its factory which was out of operation for a long time.
The textile maker now says it needs Tk30 crore to assist in production and sales.
In the January-March quarter, it will clear Tk10 crore of the Tk22 crore in dues to retrenched workers.
And the company will pay Tk1 crore against total dues of Tk8 crore to the Titas Gas Transmission and Distribution Company.
It will pay another Tk9.5 crore to the Bangladesh Export Processing Zones Authority (Bepza) against its dues of Tk47 crore to the state-run agency.
In a regulatory filing, the company said Bepza asked it to clear at least Tk20 crore of its dues. Otherwise, the authority will suspend the export-import permits of the company, which may lead to the closure of the company once again.
Moreover, it will use Tk5 crore for repairing and maintenance and Tk4 crore for rescheduling bank loans.
Mejbah Uddin, the new company board chairman, said the company is in operation but faces numerous challenges.
"A portion of the IPO funds have been sought to tackle some challenges and we need support for the smooth operation of the company," he added.
In January last year, the market regulator restructured the board of directors of Ring Shine Textiles to rescue the company from its worsening condition.
For this to be attained, the commission appointed seven independent directors to observe the company's overall condition and make a plan on how to operate it.
On 13 June 2021, the factory went back into production at 25% capacity. Production stopped in September 2020, badly affected by the Covid-19 pandemic.
Shortage of working capital, a decline in orders from foreign buyers, and a shortage of imported raw materials accelerated the factory shutdown.
The company has recommended 1% cash and 1% stock dividends for its shareholders for fiscal year 2019-20.
