Savar Refractories plans to exit stock markets

Savar Refactories—the clay product and refractory manufacturer—has planned to exit the capital market in the face of continuous losses.

The company announced the plan after a revaluation of its assets, said the company in a regulatory filing on Thursday.

As per the exit plan, the share price will be paid to the shareholders based on the net asset value (NAV) of the company.

“We’ll soon publish the NAV for 2021-22. The shareholders will be paid in line with the NAV,” Savar Refractories Company Secretary Belayet Hossain Khan.

The company’s total number of shares is 13.92 lakh. The company’s executive directors hold 50.68 percent, institutional investors 7.18 percent, and individual investors 42.14 percent of the total number of shares.

“It is not possible to say how many days are required to complete the process,” said the company secretary.

BSEC spokesperson Rezaul Karim told the Business Post, “The commission has already prepared a policy outlining what to do if a company wishes to be delisted from the capital market.”

He said, “Previously, many companies were delisted without paying their investors, but this time it will not happen.”

Savar Refractories has revalued its property, plant, and equipment for delisting from the capital market on March 31, 2022. After revaluation, the asset value increased by Tk 14.12 crore to Tk 18.71 crore, which was Tk 4.59 crore earlier.

The company board also decided existing sponsors and directors will offer to the shareholders other than sponsors and directors at the NAV after considering the revaluation surplus and other balances as a part of voluntary delisting subject to the approval of BSEC and shareholders at the general meeting.

It has been suffering losses amounting to Tk 1.59 crore due mainly to the scarcity of raw materials, and low demand.

In the January-March 22 quarter, the company’s EPS stood at Tk 0.34--the highest loss in the last four years, and in the January-March 2020 quarter, its lowest ever EPS was Tk 0.16. In June 2020, its highest NAV was Tk 2.88.

Savar Refractories share prices dropped 1.43 per cent to Tk 261.10 on Thursday.

Earlier, sixteen companies were recommended for delisting after being reviewed under the Dhaka Stock Exchange (DSE) Listing Regulations. Savar Refactories was one of them.

For delisting a company, four factors are considered. If a company pays no dividends for five years, holds no AGM in three consecutive years, voluntarily or involuntarily winds up, is not in production for three straight years, and pays no listing fees for three years.

Since its listing in 1988, the company paid no dividends.

However, the share price of Savar Refractories rose 53 per cent to Tk 265 in the last six months. Its highest price was Tk 285.2.