Berger Paints’ rights subscription to begin July 15

Rights shares subscription of Berger Paints Bangladesh is set to begin July 15, aiming to raise Tk 3.03 billion through rights issuance.

The subscription period for the multinational paints manufacturer will continue until August 3 this year.

The record date for entitlement of rights shares has been fixed on June 29, according to a price sensitive information published on Wednesday.

The rights shares issue is an offer of new shares by a company to its existing shareholders in proportion to the shares they already own and usually at a discount to market price within a specified time.

The Bangladesh Securities and Exchange Commission (BSEC) on Tuesday allowed the company to raise the said amount by issuing 2.73 million rights shares to increase the free float shares to more than 10 per cent from 5 per cent.

As per the regulatory approval, Berger will issue shares at Tk 1,110 each, including Tk 1,100 as a premium. The shares will be issued exclusively to general shareholders and its eligible employees, excluding its sponsor-directors.

Berger will issue one rights share against existing one share since its parent company J&N Investments will not subscribe to any right shares.

Berger received an exemption from the stock market regulator regarding sponsor-director share subscription. The exemption was granted because the plan to increase free float shares in the market, as per rules, would not have succeeded if rights shares had been issued to all shareholders, including its sponsor-directors.

The proceeds of the rights issue will be utilised for financing a portion of the establishment of its third factory at National Special Economic Zone at Mirsarai.

Berger has been investing for capacity expansion as well as the diversification of products and businesses, particularly those with a low environmental impact.

IDLC Investment is working as the issue manager of the rights offer.

babulfexpress@gmail.com