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The securities regulator on Wednesday scrapped the IPO proposal of Delta Hospital as the company is unwilling to go public with 'insufficient' share price determined at the bidding.
The decision was taken at a meeting at the office of the Bangladesh Securities and Exchange Commission (BSEC).
The company has recentlyconducted IPO (initial public offering) bidding participated by eligible investors (EIs) under the book building method.
At the bidding, the cut-off price was determined at Tk 11 each. As per the public issue rules, general investors are supposed to get IPO shares at Tk 9.90 each despite the face value is Tk 10 each.
Under such a situation, the board of directors of Delta Hospital took a decision of withdrawing the IPO proposal due to 'insufficient' share price determined through bidding.
Besides, the company will have to issue additional amount of shares for which the amount of shares held by sponsor-directors will go down below stipulated 2.0 per cent.
As per the 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.
Most of the sponsor-directors, who nurtured Delta Hospital for long time,will lose their directorship as their individual shareholding portions will go below 2.0 per cent if additional shares are issued to raise the proposed amount of capital worth Tk 500 million.
Under such a situation, the company made a proposal to the securities regulator last week for scrapping the IPO proposal and the BSEC approved it on Wednesday.
The securities regulator has also said the EIs will get back their subscription money, earlier deposited to take part in bidding, within five working days.
At Wednesday's meeting, the securities regulator also approved the draft prospectus of CWT-SadharanBima Growth Fund whose initial size will be Tk 100 million.
The offer price of the fund's units will be Tk 10 each. SadharanBima Corporation is the sponsor of the fund, while CWT Asset Management Company is the asset manager.