Metro Spinning Limited, a concern of Maksons Group, has suspended its production for a year to renovate its factory and enhance production capacity.
The spinning mill announced the closure of its factory in a Dhaka Stock Exchange (DSE) filing on Thursday but did not disclose the date of the closure.
According to the DSE data, the downfall of Metro Spinning's stock started from 12 September. By 21 September, its share price dropped over 26% to close at Tk27.2 each.
In the DSE disclosure on Thursday, the company stated it will duly notify the shareholders and regulatory authorities about the progress of the factory refurbishment work and resumption of commercial production.
The Business Standard tried to contact Metro Spinning's Chairman Mohammad Ali Khokon for a comment but he did not answer the calls.
Subsequently, TBS reached out to Metro Spinning's Company Secretary Mohammad Jewel Rana who stated, "We began the renovation work two months ago as planned. However, since we filed the disclosure on Thursday, the one-year factory closure period will commence from that day.'"
He said that the plan, though made long ago, was delayed due to various complications.
"Despite the foreign currency crisis, we imported the necessary machinery and started the refurbishment," he added.
The project was initiated in November 2021. The company opened a letter of credit in August this year for the import of the latest automated capital machinery with modern technology.
What to expect from the renovation work
After the factory renovation, the company will have a total of 35,520 spindles, including an additional 24,000.
This would increase the production capacity to 25,000 kg of yarn per day, from the existing daily capacity of 7,200 kg.
Furthermore, the company expects an annual revenue of Tk300 crore from the enhanced production capacity. At the existing capacity, it annually generates Tk100 crore in revenue.
Metro Spinning invested nearly Tk200 crore on its factory reconditioning, 60% of which was financed through loans, and 40% from the company's own sources.
Jewel Rana said the project is designed to produce all types of yarn, including value added man-made fibre yarn besides the cotton yarn.
In the first half of the fiscal 2022-23, the company's revenue was Tk44.76 crore and earnings per share Tk0.98.
At the end of the fiscal 2021-22, its revenue stood at Tk96 crore.
It had declared a 3% cash and 5% stock dividends for FY22. However, it could only disburse the cash dividend as the Bangladesh Securities and Exchange Commission (BSEC) rejected its stock dividend.
The company has not disclosed the third quarter's financial statement for FY23 in the stipulated time set by the Bangladesh Securities and Exchange Commission (BSEC).
Out of the total shares of the company, sponsors and directors hold 30.09%, institutional investors 11.63% and the general investors 58.28%.