The Esquire Knit Composite Limited (EKCL) board of directors has approved an investment of Tk 5 crore in L'Esquire Ltd – a subsidiary of the company – in a bid to better handle upcoming export opportunities.
“This investment will be financed by withdrawing Tk 5 crore from Impress Capital Ltd – another associate company. EKCL had previously invested Tk 10 crore in Impress Capital Ltd,” an EKCL filing with the Dhaka Stock Exchange mentioned on Thursday.
The filing further stated that the initiative is part of a continued investment in a subsidiary company that will meet upcoming export opportunities, and secure profit and dividend for the EKCL.
On Thursday, Esquire Knit shares rose 3.24 per cent to Tk 25.50 on the Dhaka Stock Exchange (DSE).
Previously, Esquire Knit Composite Ltd invested in L'Esquire Ltd by leveraging investments from two of its associates.
On June 22, 2022, information published on the DSE website stated that Esquire Knit Composite Ltd invested Tk 4.77 crore in its subsidiary company, L'Esquire Ltd.
This investment would be financed on the basis of the withdrawal of equivalent capital invested in its two associate companies, where Esquire Electronics Ltd had Tk 3.75 crore and Esquire Accessories Ltd had Tk 1.02 crore.
On January 5 last year, Esquire Knit Composite Ltd decided to issue preference shares in a bid to finance expansion projects and machinery procurement. The company planned to raise a Tk 100 crore fund by issuing 10 crore preference shares at Tk 10 each, according to a DSE filing.
Out of the fund to be raised, the company would spend Tk 65 crore to finance its expansion projects and machinery procurement, while the remaining Tk 35 crore would be utlised to repay bank borrowings.
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.
Currently, the EKCL has a reserve and surplus of Tk 637.39 crore while its paid-up capital is Tk 134.89 crore. The company has a short-term loan of Tk 394.12 crore and a long-term loan of Tk 199 crore.
Located at Sonargaon in Narayanganj, Esquire Knit has been emerging as a conglomerate with knitting, fabric dyeing and finishing facilities under one roof since its commercial launch in 2001.
Esquire Knit Composite Ltd, which produces different types of knit garments and sells them to foreign buyers, raised Tk150 crore from the capital market in 2019.
From July to December 2023, its net loss was Tk 14.83 crore, which was Tk 6.87 core one year ago. During the period, its earnings per share were negative Tk 1.10 and its net asset value per share was Tk 64.20 with revaluation.
Sponsors and directors jointly hold 46.95 per cent of the company’s shares, while institutions and general investors own 40.92 per cent and 12.13 per cent, respectively.
