Notice to Associate Oxygen for IPO Misuse

Staff Reporter: Companies listed on the stock exchange this year: Associate Oxygen has violated the law on repaying bank loans with IPO money. Therefore, the regulatory body Bangladesh Securities and Exchange Commission (BSEC) has warned the company for the last time.

As of October this year, 6 per cent of the company’s outstanding IPO proceeds from the IPO have been unused. Therefore, the commission has warned the company about repaying the bank loan for the last time.

On November 15, the bank applied to the BSEC to extend the loan repayment period using the funds of the Associated Oxygen IPO. In response to the request, the BSEC warned in a letter to the company’s managing director recently. At the same time, the matter has been brought to the notice of the Chief Regulatory Officer (CRO) of Dhaka Stock Exchange and Chittagong Stock Exchange (DSE-CSE).

According to the letter, Associated Oxygen has sent a letter on December 15 to extend the repayment period of the bank loan using the IPO money. In this situation, the commission did not extend the time for repaying bank loans using IPO money. The commission also asked that the letter be considered a “final warning” against such violations.

According to the data, Associated Oxygen raised 15 crore rupees from the stock market by issuing 15 million shares. The company produces and supplies industrial gas, medical gas and welding gas. Through the IPO, the company has decided to increase its business by raising Rs 15 crore and constructing new stock tents and new plant sheds.

As well as setting new targets to purchase new equipment and repay bank loans from IPO money. After being registered in 1990, Associated Oxygen started business in December 1992.

According to the latest data on the use of IPO money by Associated Oxygen, 9 crore 11 lakh 84 thousand 917 rupees have been used out of 15 crore rupees till September 30 this year. Of this, 7 crore 30 lakh 7 thousand 428 rupees for construction of new plant seed and store shed, 71 lakh 33 thousand 136 rupees for new plant and machinery, 44 lakh rupees for bank loan repayment and 1 crore 55 lakh 43 thousand rupees for IPO related expenses. 353 has been spent.

9 crore 14 lakh 52 thousand 917 taka has been used for IPO till 31st October. Of this, Tk 2 lakh 8 thousand was spent on construction of new plant seed and store shed in October alone. No money was spent on new plant and machinery, bank loan repayment and IPO related expenses in that month.

As a result, out of 15 crore IPOs till October, 5 crore 65 lakh 46 thousand 72 taka is unused. Of that amount, 1 crore 56 lakh or 6 percent is unused for bank loan repayment. In this situation, Associated Oxygen has written a letter on December 15 to extend the loan repayment time using the money of IPO.

Incidentally, Associated Oxygen was listed on the stock exchange on October 25, 2020. Earlier, on July 18, BSEC approved the company’s IPO. The face value of the company’s shares is set at Rs. BD Finance Capital Holdings is the issue manager of the company.

The paid up capital of the ‘A’ category company is Tk 102.70 crore. Therefore, the total number of shares of the company is 10 crore 26 lakhs. Of these, 30.85 per cent are held by entrepreneurs or managers, 24.07 per cent by institutional investors, 0.07 per cent by foreign investors and 45.21 per cent by general investors.


Source: Daily StockBangladesh by www.dailystockbangladesh.com.

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