Esquire Knit to raise Tk100cr by issuing preference shares

The board of directors of Esquire Knit Composite Limited (EKCL) has decided to issue preference shares in a bid to finance expansion projects and machinery procurement.

The company planned to raise a fund worth Tk 100 crore by issuing 10 crore preference shares at Tk 10 each, according to a DSE filing issued on Wednesday.

Out of the fund to be raised, the company would spend Tk 65 crore to finance its expansion projects and machinery procurement, while the remnant Tk 35 crore would be utlised to repay bank borrowings.

The company said the decision requires the approval of its shareholders, further subject to the Bangladesh Securities and Exchange Commission’s (BSEC) consent.

Preference shares are company shares against which investors avail no voting right and enjoy preference over the general shareholders to avail dividends in a regular situation as well as the leftover during liquidation.

The company’s preference shares would be issued for eight-year tenure and in nature it would be fully redeemable, non-convertible, cumulative preference shares.

Its dividend payment system would be paid semi-annually.

On the same day, the company also announced to get renamed Esquire Knit Composite PLC from the existing Esquire Knit Composite Limited as per the Companies Act 1994.

Currently, EKCL has a reserve and surplus of Tk 446.8 crore while its paid-up capital is Tk 134 crore. The company has a short-term loan of Tk 211 crore and a long-term loan of Tk 214 crore.

EKCL got listed on the bourses with a cut-off price of Tk 45.508 per share for eligible investors, and offered 10 per cent less for the public on April 9, 2019.

The earnings per share (EPS) of the company stood at Tk0.09 with the net asset value per share of Tk 37.96 for the first quarter of the fiscal year 2022-23.

Esquire Knit Composite shares were traded at Tk34.5 per share on the DSE trading board on Wednesday.