BSEC rejects National Polymer’s preference shares application
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The stock market regulator has rejected the application of National Polymer Industries for seeking issuance of preference shares as the company failed to comply with conditions.
In June last year, National Polymer applied to issue redeemable, cumulative, non-convertible and non-participative preference shares amounting to Tk 1 billion through private offer.
The tenure of preference shares was five years and the company was supposed to utilize the proceeds to repay its existing debt.
But the Bangladesh Securities and Exchange Commission (BSEC) is not in a position to give consent to the application of National Polymer for issuance of preference shares, according to a stock exchange filing on Monday.
When asked, company secretary Md. Abdul Maleque, said they received the letter but they will not appeal to the commission for further review.
The company secretary declined to comment why the commission rejected the application. Also, the securities regulator did not mention any specific reason why it was not in a position to approve the application.
Preference share, also known as preferred stock, is an exclusive share option which enables shareholders to receive dividends announced by the company before the equity shareholders.
Preferred shares typically pay steady dividends, while common stock only pays dividends if they are approved by the board of directors based on financial performance of the firm.
Following the news, its stock dropped 1.9 per cent to Tk 31 on Monday at the prime bourse.
Financial performance
National Polymer’s profit plunged 97 per cent year-on-year to Tk 0.73 million in the second quarter of FY25, due to ongoing economic challenges that customers’ demand for PVC products were significantly reduced, which adversely affected the revenue.
Its half-yearly profit also dropped 62 per cent year-on-year to Tk 28 million in July-December last year.
National Polymer started its business officially in June 1987 and now it is growing up successfully in multiple sectors.
The company is engaged in producing diversified products like UPVC, PP-R, CPVC pipes and fittings, PVC doors, Sheet, Ceiling also plastic household and furniture products.