National Tea Company Limited has faced a setback in its plan to issue placement shares worth Tk 2.80 billion. The Bangladesh Securities and Exchange Commission (BSEC) has suspended the share subscription until the Appellate Division resolves a writ petition challenging the move. Initially approved by the BSEC in April, the plan aimed to raise the capital by issuing 23.4 million shares at Tk 119.53 per share, including a premium of Tk 109.53 per share. However, a general shareholder named filed a petition with the High Court, contesting the unequal distribution of shares among investors, with government entities offered 4.43 new shares for each existing share, non-government sponsor-directors offered a ratio of 3.21:1, and general public investors offered the lowest ratio of 2.85:1.
The uncertainty surrounding the share issuance has affected National Tea’s stock price, which peaked at Tk 444.70 on June 21 but closed at Tk 421.20 on the latest reported date. The company’s plan to increase its paid-up capital comes amid financial challenges, having incurred losses in the past three fiscal years, yet still distributing a 7.50% cash dividend for FY22.