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The Bangladesh Securities and Exchange Commission (BSEC) has rejected First Security Islami Bank’s rights offer application.
‘BSEC is not in a position to consider the application for approval of issuance of rights shares of the bank,’ according to a filing with the Dhaka Stock Exchange (DSE) Thursday.
The securities regulator refused the bank’s application due to failure to form nomination and remuneration committee (NRC), increase in number of outstanding shares for payment of stock dividend for the year 2021 and shares of the bank are trading near to face value in the month of August 2022, according to the filing.
A rights offer refers to the issue of additional shares by a listed company to raise capital from existing shareholders.
First Security Islami Bank decided to increase its paid-up capital through issuing rights shares on September 19, 2021.
Accordingly, the bank applied for issuance of rights shares at a ratio of 1:2 (one right share for existing two shares) at an issue price of Tk 10 each.
The bank had planned to raise capital of Tk 4.98 billion by issuing the right shares to cope with the business growth and strengthen the capital base as well as maintaining adequate capital as required by Bangladesh Bank.
Each share of the bank, which was listed on the capital market in 2008, closed at Tk 10 each on Wednesday.
The bank’s consolidated earnings per share were Tk 0.87 for January-June 2022 as against Tk 0.49 for January-June 2021.
Sponsor-directors own 33.02 per cent stake in the bank while the institutional investors own 28.53 per cent, foreign 1.52 per cent and the general public 46.93 per cent as of July 31, 2022, the DSE data shows.