Bangladesh Steel Re-Rolling Mills Ltd (BSRML) is set to merge with BSRM Steel Mills Ltd under the provision of section 228 and 229 of the Companies Act 1994. The merger and acquisition is subject to the consent of shareholders and approval from the High Court division of Supreme Court.
Bangladesh Steel Re-Rolling Mills (a listed entity) is currently holding around 44.97 percent stake in the (non-listed) BSRM Steel Mills Ltd.
The merger will help cut costs by reducing corporate taxes, as non-listed companies have to pay 35% corporate tax, but firms listed with the capital market pay only 25%.
The board has decided to acquire 100 percent stake of BSRM Steel Mills by Bangladesh Steel Re-Rolling Mills paving the way for merger of BSRM Steel Mills with Bangladesh Steel Re-Rolling Mills by issuing shares against rest of the stakes (around 55.03 percent) of BSRM Steel Mills after completion of all legal and regulatory formalities.
The Bangladesh Steel Re-Rolling Mills has also appointed a valuer (listed with BSEC) to determine the purchase consideration and shares to be issued by Bangladesh Steel Re-Rolling Mills to the 55.03 percent stakeholders of BSRM Steel Mills.
After the merger, BSRM Steel Mills Ltd will not remain as a non-listed company anymore. The shares of BSRM Steel Mills Ltd will then be blocked for three years.
BSRM Steel Mills Ltd produces billet, a raw material for manufacturing rods. The company went into commercial production in 2016. In the next two years the company suffered a loss of Tk 98 crore. However, in 2017-18 fiscal, BSRM Steel Mills made a net profit of Tk 94 crore, after paying taxes. At present the company produces 860,000 metric tonnes of billet per year.
The paid up capital of BSRM Ltd, which produces mild steel rods, is Tk 236 crore.
Boards of directors of Bangladesh Steel Re-rolling Mills and BSRM Steels Ltd have recommended 25 percent cash dividend each for the year ended on June 30, 2019.
The final approval of the dividend will come during the annual general meeting (AGM) scheduled to be held on December 19 in Chattogram. The record date is on October 27, 2019.
The company has also reported consolidated earnings per share (EPS) of Tk 7.88, consolidated net asset value (NAV) per share of Tk 97.46 and consolidated net operating cash flow per share (NOCFPS) of Tk 39.62 for the year ended on June 30, 2019 as against Tk 11.77, Tk. 63.70 and negative Tk 37.39 respectively for the same period of the previous year.
The company has further informed that they have generated better cash flow from operation consecutively for the last couple of years and now recovered fully.
The board of directors of BSRM Steels Ltd has recommended 25 percent cash dividend for the year ended on June 30, 2019. The AGM will be held on December 19 in Chattogram. The record date is on October 27, 2019.
The country’s leading steel maker also reported EPS of Tk 4.60, NAV per share of Tk 55.58 and NOCFPS of negative Tk 12.43 for the year ended on June 30, 2019 as against Tk 4.79, Tk 37.48 and Tk 2.20 respectively for the same period of the previous year.
