Safko Spinning goes out of production for 2 months

Safko Spinning Mills – a manufacturer of cotton and polyester textile yarn – has suspended its production for the next two months, starting on 12 February, according to a stock exchange filing.

However, other activities of the mills, such as maintenance works, will continue as usual, says the disclosure made yesterday.

The shares of the company closed 9.90% lower at Tk17.30 each after being downgraded to the Z category. This punitive action was due to its accumulated loss exceeding the paid-up capital.

Earlier this month, Bank Asia decided to put on auction its assets, which were mortgages to borrow money.

Regarding such steps by the lender, Safko Spinning said that over the last year, it has encountered significant challenges attributable to various factors, including escalating dollar rates and exorbitant increases in gas and electricity prices.

"These collective issues have profoundly impacted our spinning mill's operations, resulting in substantial financial losses," it adds.

Safko Spinning Mills got listed on the bourse in 2000. 

It incurred a loss of Tk16.50 crore in FY23 and did not pay any dividends to its shareholders.