The stockmarket regulator yesterday directed twin bourses to list MI Cement Factory Ltd on their trading boards, a move that ends a stalemate over the listing of the cement maker.
The Securities and Exchange Commission issued a circular after a meeting on the MI Cement issue, said an SEC official.
“The bourses will have to list MI Cement immediately after fulfilment of the conditions that the company proposed, and agreed by the regulator as well as the bourses,” the official said.
Earlier, MI Cement proposed that sponsor directors will compensate the investors if share prices go below the offer price within the first six months of trade. The company will deposit Tk 5 crore in security funds to fulfil the compensation package before receiving the listing approval from the bourses.
Also, the company will set aside a fourth of total shares from the directors’ portion for the bourses. If the compensation amount crosses Tk 5 crore, the exchanges could go for selling those shares.
MI Cement has already raised Tk 335.05 crore from the public using the book-building method by floating 3 crore ordinary shares of Tk 10 each with issue price of Tk 111.60 per share.
Data submitted by the company to the DSE shows earnings per share of MI are Tk 93.87 and net asset value is Tk 37.01 per share as of June 2009.
Earlier, the SEC asked the company to buy back shares, if its share prices slip below the offer price within the first six months of trading, and asked the bourses to take proper actions as per the listing rules.
But the listing committee of bourses opposed the move on a condition of buy-back, saying huge complexities would arise if the company is listed.
The stalemate was created over MI Cement after the stockmarket regulator suspended the book building method in January following a government instruction.
A volley of criticisms came from economists, market experts, analysts and stakeholders over the misuse of the mechanism.
At yesterday’s meeting, the SEC however rejected rights offering proposal of Saiham Textiles, a listed company.
“The rejection came after the commission found inconsistency between the company’s net asset value and the offering price for rights shares,” the SEC executive director said.
Earlier, Saiham Textiles recommended one and a half rights shares for each existing share at an issue price of Tk 40, including Tk 30 in premium.
Meanwhile, stocks continued to decline for a third day with investors gradually losing their confidence in the market.
The benchmark index of the Dhaka Stock Exchange, DSE General Index, fell 57 points, or 0.9 percent, to 5,806 at the end of a four-hour trading session.
Of the issues traded on the DSE floor, 154 declined, 88 advanced and 11 remained unchanged.
The low confidence also left its impact on the day’s turnover, which came down to Tk 446 crore, down by Tk 167 crore from that of the previous day.
Source: The daily star, 27 April, 2011