Delta Hospital has applied to withdraw its IPO (initial public offering) proposal to avoid the non-compliances to be created on the company's listing with the share price determined by eligible investors.
Under the book building method, the company earlier submitted IPO proposal to raise a capital worth Tk 500 million and the share price has already been fixed at Tk 11 each through electronic bidding participated by eligible investors.
As a result, the general shareholders are supposed to get shares at Tk 9.90, whereas the face value is Tk 10 each.
After fixing share pricing at Tk 11 each, the company has applied to the Bangladesh Securities and Exchange Commission (BSEC) expressing unhappiness about the lower price.
"Our company does not deserve such lower price determined at the bidding," said Al Mamun, company secretary of Delta Hospital.
He said the company now will have to offload huge amount of shares to fulfill the target of capital due to lower share price fixed at the IPO bidding.
Most of the sponsor-directors, who served the company for a long time, will lose directorships as theirindividual shareholding portions will go below stipulated 2.0 per cent after listing, the company secretary said.
As per public issue rules, each sponsor-director of a listed company must hold minimum 2.0 per cent shares and they jointly will hold minimum 30 per cent shares.
Presently, there are 10 sponsor-directors at Delta Hospital and seven of them may lose directorship after listing with the share price fixed by eligible investors.
"The indicative price (Tk 11)determined by eligible investors was our beyond expectation as the company's earnings per share (EPS) is Tk2.10 and net asset value is Tk 45," Mr. Mamun said.
The company secretary also said the sponsor-directors jointly will also not be able to hold minimum 30 per cent shares if the company is listed with the price fixed at the bidding.
"The ongoing situation created following the COVID-19 pandemics has also compelled the board to backtrack from going public," said the company secretary of Delta Hospital.
Asked, Mohammad Saifur Rahman, an executive director of the BSEC, said the commission will take decision considering the overall situation.
As per the existing rules, the BSEC cannot compel a company to go public, said another BSEC official.
"A company can take any decision including the withdrawal of its IPO proposal. Before listing, the regulator cannot instruct a company to act as per its directions," the BSEC official said.