The Bangladesh Securities and Exchange Commission (BSEC) allowed Kapita Packaging Solutions Limited to take over Yeakin Polymer Limited – a publicly listed poly sack manufacturer that has been struggling since 2018.
According to the share purchase agreement between the two parties that was approved by the BSEC last week, Kapita Packaging will buy out 30.114% shares from the sponsor-directors of Yeakin Polymer at the face value of Tk10 each.
The BSEC issued its go-ahead to the depository service provider, bourses, and concerned stockbrokers for unblocking the 30.114% stake of Yeakin in the depository system and transferring the shares to Kapita Packaging.
However, after the share transfer, the concerned entities will again have the shares blocked so that the new owner cannot sell them without prior regulatory approval.
Yeakin owes nearly Tk34 crore to various lenders and the company's outgoing sponsor-directors must obtain no-objection certificates (NOCs) from those lenders.
After the share transfer is completed, Kapita Packaging will nominate its directors for the new board, and welcome other shareholders to the board if they have at least a 2% stake in the company.
It will also ensure the resumption of production within two months and further take care of its dues.
Yeakin Polymer showed massive growth in its revenue and profits after its stock market listing in 2016. The Satkhira-based company had raised Tk20 crore through its initial public offering.
But after two years of its listing, the company's business started to decline partly because of the government's policy decision to promote jute sacks over the polymer ones.
Earlier, sources told The Business Standard that the company went off production before the pandemic because of loan defaults with the Islami Bank Bangladesh.
The company, however, kept this information from its shareholders and continued to publish revenue and profit/loss figures.
Also, its statutory auditor did not speak a single word regarding the layoff in the company's recent annual reports.
Yet, the stock market speculators were found to be very active in trading Yeakin's shares.
In just nine weeks till 9 February, its stock price rose by 150% to over Tk25 per share from Tk10.
Institutional investors hold 16.14%, while general investors hold 53.34% shares of Yeakin Polymer, according to the Dhaka Stock Exchange (DSE).
Yeakin Polymer shares closed at Tk22.3 each on Tuesday on the DSE.