The securities regulator has consented to the revised plan to utilize right issue proceeds by Alif Manufacturing Company.
The Bangladesh Securities and Exchange Commission (BSEC) gave the approval recently following approval by the company's shareholders.
The company took the shareholders' approval to a special resolution regarding utilisation of revised right issue proceeds in its 27th annual general meeting (AGM).
As per the rights share offer document (ROD) of the company, the right issue (RI) proceeds were supposed to be used up by June 4, 2019.
The company earlier applied for an extension up to December 31, 2020.
Due to the Covid-19 pandemic, there was a countrywide lockdown for months since March 26, 2020.
Under the situation, the construction works of the company's factory was hampered severely.
For the reason, the management could not ensure full utilisation of RI fund within the stipulated time, the company said in its annual report.
"Considering the greater interest of the shareholders", Alif Manufacturing Company said, the board decided to extend the time for the full utilisation of RI fund by the end of 2022.
Alif Manufacturing Company, formerly known as CMC Kamal Textile Mills, raised Tk 1.09 billion through rights issues in February 2018.
On completion of the fund utilisation, the company received the regulatory consent submitting special
resolution approved in the AGM, said Mahfuzur Rahman, company secretary at Alif Manufacturing Company.
The company had a budget of more than Tk 296.67 million for a yarn dyeing project. Later, its board decided to discontinue with the plan as the market for yarn dyeing was saturated.
Besides, the company had to bear extensive ETP cost.
It was not cost effective and the project required additional gas allocation which was not available at the time.
Therefore, the company's board decided to use the proceeds to expand its spinning capacity. It required additional Tk 308.42 million for purchasing machineries and to pay subsequent cost of electrification.
The company's revised fund utilization plan also included the payment of short-term loans of Tk 44.51 million.
CMC Kamal Textile Mills, presently known as Alif Manufacturing Company, was listed on the stock exchange in 1997.
The sponsor-directors hold 30.46 per cent shares, institutes 4.14 per cent, and general investors 65.40 per cent, according to data available until the end of 2022.
