Yeakin Polymer's stake transfer incomplete even after 16 months of BSEC approval

Yeakin Polymer Limited — a publicly listed poly sacks maker — has failed to complete the sale of its sponsor-director shares to Kapita Packaging Solutions Limited even after 16 months of regulatory approval.

Now, the approval to transfer Yeakin's ownership by the Bangladesh Securities and Exchange Commission (BSEC) has become time-barred and non-executable.

For handing over the ownership to Kapita Packaging, Yeakin Polymer has to ask for a time extension of the approval from the BSEC.

In May 2022, the commission allowed Kapita Packaging to take over Yeakin Polymer, which has been in a dire strait since 2018.

According to the share purchase agreement between the two parties, Yeakin is supposed to sell 30.114% or 22,193,745 sponsor-director shares to Kapita Packaging at a face value of Tk10 per share.

The BSEC had 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 before selling the shares.

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.

The BSEC had given the companies 30 working days from the date of approval to complete the ownership transfer. But the sponsor-directors have not fully transferred their shares to Kapita Packaging yet.

Now, the regulator wants to know the reason behind the delay, and also the current production status of Yeakin Polymer's factory.

BSEC Executive Director Mohammad Rezaul Karim said the commission issued a consent letter for the company to transfer shares as per the share purchase agreement, but it failed to meet the deadline.

Now, the consent letter has lost its effectiveness. The company has to extend the time of the consent letter to complete the transfer process, he added.

Yeakin Polymer's Chairman Quazi Anwarul Haque said they could not complete the stake transfer within the stipulated time owing to some process complexities.

"We hope to complete the whole process within November this year, as a big portion of the process has been already completed," he added.

Meanwhile, Yeakin's share price rose several times at the Dhaka Stock Exchange (DSE) riding on the news of ownership transfer coupled with some rumours about the resumption of the company's production.

On 20 July this year, Yeakin's DSE share price closed at Tk31.40, a 93% jump from Tk16.3 on 30 April 2023. On Tuesday, the company's shares closed at Tk24.20 at the DSE.