BASIC Bank reveals plans to auction off company’s assets
Emerald Oil, a rice bran oil maker, has seen a bumpy performance since being listed with the Dhaka Stock Exchange (DSE), which in turn has led its investors down a tumultuous road.
Now, the latest development from its banking partner — BASIC Bank — has plunged investors into real jeopardy yet
The state-owned lender said it would auction off the assets — land and machinery — pledged as collateral by Emerald Oil Industries after multiple failures to recover the company’s outstanding loans.
However, the listed company provided a disclosure yesterday, alleging that it has not received any such letter from the bank or any court order/notice yet.
According to the auction notice posted by the bank, Emerald Oil’s outstanding dues amounted to Tk 91.95 crore till 2018. In order to recover the amount, a total of 541 decimals of land, along with local and international machinery, will be auctioned if suitable bidders come forward.
Established in 2008, Emerald Oil Industries launched its rice bran oil brand “Spondon” in 2011.
It raised Tk 20 crore from the public to pay off loans and meet working capital needs before getting listed in 2014, which caused its share prices to soar.
However, it abruptly stopped production in 2017, leaving general investors in hot water.
This led to the company being downgraded to the Z category, reserved for junk stocks, and its share price plummeted well below its face value of Tk 10.
Due to the shut down in production, Emerald Oil Industries failed to provide dividends for five years. As a result, the Bangladesh Securities and Exchange Commission (BSEC) recast the board in 2021.
A couple of years later, Minori Bangladesh, a subsidiary of Japanese farming company Minori Co, invested in Emerald Oil industries and availed a 30 per cent stake.
The company then returned to operation in 2022 and announced that it planned to export rice bran oil. The company even provided 10 percent cash dividend for 2022-23 and was upgraded to A category.
As such, investors became hopeful of the company’s future. Subsequently, its share price soared from Tk 28 to Tk 178 in the span of just seven months in 2023.
However, soon after soaring to a historic high, the stock started to tumble.
Although the company announced plans to send its products abroad, no further information was provided about its exports after the initial disclosure.
Even more shocking is the fact that within one year of providing the disclosure regarding planned exports, the company shut off production again on January 1, claiming that it had been crippled by a shortfall in gas supply.
The DSE then demoted the company to the Z category again, causing its share price to plunge to Tk 30.
The latest announcement from its bank has only served to dishearten investors further. The company witnessed a 2.77 percent drop in its share prices on the DSE yesterday to close at Tk 24.60.
Despite repeated attempts to contact him via phone and text, Emerald Oil Managing Director Md Afzal Hossain could not be reached for comment.
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