Dragon Sweater plans to merge with another sweater unit

The Dragon Sweater and Spinning Limited (DSSL) plans to merge with another sweater unit of its parent company, subject to the relevant regulatory approval.

The board of directors of the company has recently cleared the planned merger with Dragon Sweater Limited, a subsidiary of Dragon Group, said the DSSL in a filing with the Dhaka Stock Exchange (DSE) on Monday.

Chartered accountant firm Aartisan already prepared the amalgamation plan, it added. 

However, DSSL Company Secretary Dipak Kumar Saha refused to make any comment regarding the merger plan when he was contacted.

At the meeting, the board of directors has also recommended a 10 per cent stock dividend for the year ending on June 30.

The annual general meeting (AGM) of the company will be held on December 5 to approve the declared dividend with the consent of the shareholders. Record date will be notified later after approval of the securities regulator.

The DSSL’s earnings declined slightly last financial year. It reported earnings per share of Tk 1.22 for the year ending on June 30, against Tk 1.23 of the previous year.

It also reported net asset value (NAV) per share of Tk 17.72 and net operating cash flow per share of Tk 0.45 for the last financial year, against Tk 18.98 and Tk 1.47 respectively for the same period of the previous year.

The company has informed that the retained amount of bonus share will be used for continuation of existing balancing, modernization, rehabilitation and expansion plans and to meet other investment requirements.

The DSSL expects that it would reduce borrowing from banks and increase profit benefiting the shareholders.

The DSE filing also added that the bonus shares were declared out of accumulated profit, not from capital reserve or revaluation reserve or any unrealized gain or out of profit earned prior to incorporation of the company or through reducing paid up capital or through doing anything so that the post dividend retained earnings become negative or a debit balance.

Yesterday, the company’s share price declined around 9 per cent to Tk 17.4 at the Dhaka bourse. The price moved between Tk 9.5 to Tk 24.8 throughout the last one year.

Dragon Sweater and Spinning limited is one of the largest integrated sweater and spinning mill. DSSL is one of the flagship companies of Dragon Group which is the pioneer of sweater industry.

The group played a pioneering role in the sweater industry of Bangladesh by starting the first sweater project in Bangladesh in the early 80's with technical collaboration from Hong Kong and China.