The 19-year-old steel manufacturer on January 7 announced its plan to enter the ceramic business by purchasing a majority stake in Southeast Union Ceramic Industries
SS Steel’s planned acquisition of Southeast Union Ceramic Industries’ 75 per cent stake for Tk 200 crore last month has now run into a spot of trouble with the Bangladesh Securities and Exchange Commission (BSEC).
The stock market regulator, under section 11(2) of the Securities and Exchange Ordinance, 1969, has asked the managing director of SS Steel to explain the company’s position along with the copy of the share purchase agreement, independent valuation of acquirer company and assessment of disclosed potentiality of increase of revenue and profit of SS Steel.
Dhaka Tribune has a copy of the letter, which was sent on January 28.
The 19-year-old steel manufacturer on January 7 announced its plan to enter the ceramic business by purchasing a majority stake in Southeast Union Ceramic Industries, its second acquisition in six months.
The China-Bangladesh joint venture ceramic manufacturer has a ceramic tile manufacturing factory located at Katakhali, Bagerhat in Khulna with a yearly production capacity of approximately 9.6 crore square feet.
Southeast Union Ceramic has a paid-up capital of Tk 10 crore and a yearly turnover of approximately Tk 400 crore.
All the documents asked by the BSEC have been submitted, Md Mostafizur Rahman, company secretary of SS Steel, told Dhaka Tribune.
“It remains to be seen what the BSEC will decide.”
The acquisition plan has only been approved by the board; the extraordinary general meeting has not been called yet.
The share purchase agreement will be signed with the company after shareholders give their approval in the EGM, Rahman added.
Mohammad Rezaul Karim, the BSEC spokesperson, acknowledged receiving the documents from SS Steel.
“We are looking into the matter,” he told Dhaka Tribune.
Between July and December of last year, the steelmaker logged in a profit of Tk 37.4 crore, up 15.7 per cent year-on-year.
Listed in 2019, shares of SS Steel gained 78.6 per cent in the second half of 2020. Yesterday, each share of the company closed at Tk 17.4, which is the same as in the previous session.