BD Thai seeks more time to utilise IPO fund as dollar dearth impedes imports

BD Thai Food & Beverage has sought a 12-month extension to fully utilise its IPO (initial public offering) fund, having failed to import certain machines for the dollar crisis.

It had been given 24 months' time that ended in January this year to fully use Tk 150 million raised under the fixed price method for business expansion.

Company secretary Md Habubur Rahman said they could not import some machines due to the dollar crunch.

Besides, the fund allocated for purchasing new equipment in the IPO prospectus was not enough as high inflation pushed up prices, he added.

As per the IPO prospectus, Tk 94.20 million was meant for machinery & equipment, Tk 31.77 million for building & civil works, Tk 13.03 million for land & land development, and the remaining Tk 11 million for IPO expenses.

The company has put to use 73 per cent or almost Tk 110 million of the funds to date while nearly Tk 40 million remains unspent.

Now, the company wants to change the IPO proceeds utilisation plan, which it will do in order to import necessary equipment after receiving approval of shareholders in the extraordinary general meeting scheduled for July 14. The record date is June 20.

To complete the whole process, the company has sought the additional time until May next year.

It already modified its IPO fund utilisation plan once in May 2022, saying that the equipment it would purchase became 35 per cent costlier than estimated because of price hikes in the global market and the fluctuation of the dollar rate.

"The shareholders approved certain machinery which we could not import because of some unavoidable circumstances, including the dollar crisis and the sharp devaluation of the taka," reads a letter signed by M M Aminul Islam, managing director of the company.

Now, the board wants to change the type of machines it will import.

The company that markets fruit juices, carbonated beverages, bottled water, candies, and lollipops import machines mainly from the UK, Korea and China.

The MD said the firm had shifted its focus to reducing production costs of the existing production lines and that it would be able to expand its production capacity of the beverage lines with some machines installed.

The company claimed the energy efficient machines that it had decided to buy would cut production costs enabling them to market products more aggressively at home and aboard.

"We believe these changes will have a positive impact on the financials," reads the letter.

Meanwhile, the company's revenue plunged 19 per cent year-on-year to Tk 468.63 million in the nine months to March this year. Its profit also dropped 18 per cent to Tk 38.88 million during the time, compared to the same period a year ago.

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