Foreign investor Brummer to offload more Runner shares

Mauritius-based Brummer Frontier PE II has announced its plan to further withdraw its investment in Runner Automobiles by selling 5 million shares of the company in the secondary market.

The move is part of Brummer's exit strategy set out in 2013 when it made the investment and follows the sale of 10 million shares in 2022.

Sources at Runner Automobiles said Brummer had invested in the company before its listing and had determined to withdraw its investment within 10 years. Brummer partially withdrew its investment in 2022 after the expiry of the lock-in period on sponsor holdings following the 2019 listing.

According to a disclosure posted on the DSE website on Thursday, the foreign investor would sell the said number of shares at the current market price out of its total holdings of 18.30 million shares of Runner Automobiles. The share transactions would be executed on the main board and block market of the Dhaka Stock Exchange by the end of this month.

Sources at Runner said the gradual withdrawal of investment is a common business practice among foreign investors like Brummer after local companies grow and attain operational viability.

Brummer entered Runner Automobiles in 2013 by investing Tk 1.05 billion.

Runner reported gradual profit growth from FY16 through the listing year. Its net profit was Tk 250 million in FY15 and rose to Tk 500 million in FY19.

Before the announcement to sell shares in the second phase, according to Thursday's disclosure, Brummer asked Runner Automobiles whether it would be able to purchase those shares.

Runner, however, replied that there is no provision enabling the company to buy back shares from a sponsor. Secondly, local sponsors were not willing to buy shares from Brummer.

On the role of Brummer in the business of Runner, its Chairman Hafizur Rahman Khan said Brummer's contribution was not limited to making investments and that it had also added value to the company's corporate governance.

Brummer also brought an expert from Germany and helped Runner develop accounting processes, documentation, and client selection, among other things.

"In fact, they helped us develop business models for different products," said Mr Rahman, adding that Brummer's investment had made the company profitable.

In FY23, however, Runner Automobiles, an 'A' category company, incurred a loss of Tk 879 million following a sharp decline in two-wheeler, three-wheeler, and commercial vehicle sales on the back of high import costs due to currency devaluation and dollar shortages.

In FY24, the company narrowed its losses to Tk 61 million and secured a profit of Tk 102.37 million in FY25. It distributed a 10 per cent cash dividend in FY25 while paying 11 per cent the year before.

"Our company's target is to generate profits and distribute dividends to shareholders," said Runner's chairman.

In the last one year, the company's stock price peaked at Tk 44.2 per share on November 25 last year. The price came down to Tk 29.7 on March 8 and finally settled at Tk 38.70 per share on Thursday.

Meanwhile, Runner Automobiles approved a supply and manufacturing agreement with China's electric vehicle giant BYD Auto Industry Company in March.

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