Ring Shine Textiles allowed to spend unused IPO fund

The securities regulator has allowed Ring Shine Textiles to spend the unused IPO fund of Tk 40 crore.

Of the fund, Tk 15 crore will be paid to the workers retrenched during the pandemic, Tk 3 crore to BEPZA, Tk 3.5 crore to Titas, Tk 10 crore to Premier Bank as loan payment, Tk 6 crore to Dhaka Bank as loan repayment and Tk 2.5 crore to other expenses.

“The company was asked to amend the fund utilization procedure described in the IPO prospectus,” said Bangladesh Securities and Exchange Commission (BSEC) in a statement on Thursday.

The regulator also decided to deduct the fund that was yet to be deposited by the private placement investors from the paid-up capital. The bonus shares issued for the private placement shareholders against the investments will also be deducted from the paid-up capital, it said.

In January this year, the BSEC appointed Hoda Vasi Chowdhury & Co. to audit the Ring Shine Textiles to look into its alleged window-dressing financial health.

The company halted its production of one of its factories in the Dhaka Export Processing Zone to January 23 from October last year due to a shortage of raw materials, foreign buyers, and working capital amid the ongoing coronavirus pandemic.

In December 2019, the company raised Tk 150 crore from the stock market to purchase machinery and repay bank loans. The sponsors hold 31.54 percent, institutional investors 16.23 percent, foreigners 0.05 percent, and the general public 52.18 percent of its stake.