Acme Pesticides seeks more time to complete IPO fund utilisation

Acme Pesticides has sought another 18-month extension to fully utilise its IPO (initial public offering) fund as it failed to complete fund utilisation even within an extended time frame.

The company has already used most of the IPO proceeds in line with the prospectus, but could not complete utilisation due to legal tussle with a lender, said Company Secretary Sabuj Kumar Ghosh. "So, we are seeking a time extension until December 2027."

Earlier, the company was granted a time extension until June this year.

The time extension needs shareholders' approval as well as approval from the Bangladesh Securities and Exchange Commission. To receive shareholders' consent, the company will hold an extraordinary general meeting (EGM) on July 30 while the record date is July 15.

The company raised a capital worth Tk 300 million by floating primary shares in November 2021 for business expansion and to repay loans to the National Finance.

The company was supposed to complete the utilisation of the money within 24 months on receipt of the IPO proceeds.

As per the prospectus, IPO proceeds were meant for factory building construction (expected cost Tk 101.50 million), acquisition of new plant & machinery (Tk 105 million), electrical installation (Tk 20 million), and loan repayment (Tk 55 million).

The company is yet to pay back Tk 55 million to National Finance as both the parties are locked into a legal battle at the High Court.

Ghosh said the lender was demanding higher interest than initially agreed upon.

The company's IPO proceeds balance with interest stood at Tk 95.12 million as of April this year.

However, the company secretary said they had kept Tk 55 million aside from the IPO proceeds in a separate bank account.

The company secretary expressed the hope that the issue will be resolved much before the extended time [December 2027] is over as both parties have been negotiating an out-of-court settlement.

Meanwhile, Acme Pesticides reported a loss of Tk 138 million for the nine months through March this year due to the sharp devaluation of the local currency and higher business costs.

The company has to depend on imported raw materials, so the cheaper taka impacted earnings, said the company in its earnings note.

ACME Pesticides, which manufactures and markets agro products in the categories of fertilizer, insecticides, pesticides and certified seeds, and other consumer products, also incurred a loss of Tk 103 million in FY24.

Acme Pesticides is one of the eight companies that the securities regulator in October last year decided to probe to see whether IPO funds had been used properly.

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