Business Report :
BD Thai Food, a newly listed company fails to use its initial public offering (IPO) fund within the stipulated time.
BD Thai Food wanted to purchase machinery and equipment at an estimated cost of Tk7.31 crore.
In December 2021, the food and beverage firm raised Tk15 crore from the capital market through IPO for business expansion. The money was supposed to be utilised within two years.
It was able to use 61% of the money till December 2022 because of the dollar crisis and inflation-driven high machinery price, according to company officials. Now, it seeks six months more time.
The Bangladesh Securities and Exchange Commission (BSEC) will inspect the failure of BD Thai Food.
The BSEC formed a three-member committee in early February to review the fund utilisation as per declaration of the company management, said its Executive Director Mohammad Rezaul Karim.
BSEC Additional Director Mohammed Golam Kibria is leading the probe committee where Deputy Director Md Rafiqunnabi and Assistant Director Bivas Ghosh are the members.
It committee will also check the related party transaction since the listing of the company and submit a report within 30 working days.
An official of the company requesting anonymity said, “A big portion of the IPO proceeds has been utilised. However, because of the dollar crisis the company could not import machinery within the stipulated time.”
Moreover, the fund earmarked for purchasing new machinery was not enough as high inflation pushed up the cost of machinery, he added.
However, the firm has been able to use 32.31% of the fund due to the ongoing dollar crisis and high product cost.
To complete the whole process of utilising the IPO proceeds, the now company needs more than six months.
So, the company will take approval from the shareholders through extraordinary meetings, the BD Thai Food official informed.
The company manufactures different kinds of fruit juices, carbonated beverages, drinking water, hard candies, soft candy, lollipop, and gum with machinery mostly imported from the UK, Korea and China.
The company markets its product under the brand name “Necter”. It is distributing and marketing products through 260 dealers across the country.
Earlier, in March 2022, the company changed the utilisation plan of its IPO fund.
Initially, it allocated Tk2.85 crore for a tunnel oven, according to the company’s prospectus.
But now, it will use the amount for rotary ovens and packing machines, mould parts, and other different machinery.
The company has set aside Tk84.57 lakh for importing a rotary oven and packaging machine from China, Tk18.58 lakh for importing another rotary oven from India, and Tk60.37 lakh for importing three sets of mould parts from China.
