Home ›› 28 Apr 2023 ›› Stock
Although Emerald Oil Industries, an almost disappeared rice-bran oil producer, has not yet received the final regulatory ap-proval to issue ordinary shares against its new investment, stock investors already became optimistic about its potential revival.
The securities regulator Bangladesh Securities and Exchange Commission (BSEC) in its recently held commission meeting decided to allow the company to issue ordinary shares on condition the company would clear up all its debts and publish all the pending financial reports.
If the BSEC gives the green signal, the company will issue 3.15 crore fresh shares at Tk 10 each against the investment of Tk 31.55 crore by Minori Bangladesh. Thus, Minori Bangladesh will convert its investment into shares to take a strong foothold on the company’s board.
When the securities regulator decided to give it the nod to issue fresh shares, then the company’s share price was Tk 34.7 each.
The company’s share price was Tk 30.80 per share on April 2, just before the BSEC decision.
But, following the news of the issuance of potential fresh shares, the oil producer’s shares started to soar and hit its two-year high at Tk 55.40 per share on Thursday. Thus, the company’s share price jumped 80 per cent in the last 17 trading ses-sions.
Following the unusual jump in its share price, the Dhaka Stock Exchange (DSE) on April 18 sent it a query notice asking the reason behind its staggering share price hike. The company at that time replied by saying it had now price sensitive infor-mation that could gear up its shares on the trading floor.
As per the BSEC decision, the new shares will be issued in favor of Minori Bangladesh, a subsidiary of Japanese farming company Minori Co Limited.
Following several financial scams by its previous board members of Emerald Oil Industries, the securities regulator had tak-en steps to appoint new investors in the company to bring it back into operation. Later, Minori Bangladesh had taken over the company in 2021 and resumed its production in January 2022.
The company’s shares remain locked in as per the securities rules.
Concerning the company’s issuance of fresh shares, Mohammad Rezaul Karim, executive director and spokesperson for BSEC told The Business Post Emerald Oil was not yet allowed to issue fresh shares.
“We have given them some conditions. Upon the fulfillment of those conditions, they will be allowed to issue new shares. If they fail to comply with the terms, the securities regulator will not give them approval in this regard,” he added.
The commission also directed the company to conduct all the pending annual general meetings (AGMs) as per the company act and to submit all the pending audited financial statements up to June 2022 for getting approval to issue new shares, according to sources at the BSEC.
The company released its financial reports for the fiscal years 2016-17, 2017-18, and 2018-19 in February this year.
It had not recommended any dividends for the shareholders at that time citing the suspension of its production.
Moreover, the stock regulator BSEC also directed the company to submit the particulars of its directors and its pending liti-gation status with supporting documents within 45 days for obtaining the nod to issue new shares.
In January this year, shareholders of Emerald Oil approved the decision of the issuance of new shares at an extraordinary general meeting (EGM), according to the company. The company raised Tk 20 crore through an IPO from the capital mar-ket in 2014.
Its stocks have been traded under the ‘Z’ category since 2018 as its operations remained suspended, and due to the an-nouncement of no dividends.
The company had generated a net profit of Tk 18.02 crore in FY16 and paid a 10 per cent stock dividend to its shareholders that year.
Sponsors and directors held a 38.26 per cent stake in the company, while institutional investors and the general public owned 5.93 per cent and 55.81 per cent, respectively till March 2023.
