The board of directors of RN Spinning Mills has decided to reduce its paid-up share capital by issuing 1 share against existing 7 shares (7:1) of Tk 10 each to the existing shareholders.
The reduction of paid-up share capital, however, subject to approval of the shareholders in the upcoming extraordinary general meeting, approval of the court as per section 59 along with section 60 of the Companies Act, 1994 and approval of concerned regulatory authorities, said an official disclosure on Sunday.
The company has now 392,544,834 shares that would be reduced through a proposed reverse stock split at 7:1 ratios to 56,077,833 numbers of shares.
Therefore, the paid-up capital of RN Spinning will come down to 560.77 million, from existing Tk 3.92 billion, according to the disclosure.
Officials said the company will reduce its paid-up capital to lessen its accumulated loss and enhance its capacity so that it could recommend dividends.
The company incurred huge losses in the last financial year and declared ‘no’ dividend for the year ended in June 2019.
Accordingly, the company was sent to the ‘Z’ category.
The board of directors of the company at a board meeting held on Saturday also approved the third quarter (Q3) un-audited financial statements of the company for the period that ended on March 31, 2020.
The company’s earnings per share (EPS) stood at negative Tk 0.83 in nine months for July 01, 2019 to March 31, 2020 as against Tk 0.43 for July 1, 2018 to March 31, 2019.
Its net operating cash flow per share was Tk 0.37 for July 01, 2019 to March 31, 2020 as against Tk 1.13 for the same period in the previous year.
The net asset value per share was Tk 0.37 as on March 31, 2020.
Each share of the company, which was listed on the Dhaka Stock Exchange in 2010, closed at Tk 3.70 on Thursday last.
Its share traded between Tk 2.20 and Tk 7.0 in the last one year.
Currently, the company’s paid-up capital is Tk 3.92 billion and authorised capital is Tk 5.0 billion, while the total number of securities is 392.54 million.
The sponsor-directors own 30 per cent stake in the company, while the institutional investors own 15.20 per cent, foreign investors 0.03 per cent and the general public 54.65 per cent as on February 29, 2020, the DSE data showed.
