Stocks
Minori Bangladesh in 3-Year Pact with Safa Capital for Tk400cr Emerald Oil Shares
Minori Bangladesh Ltd, the largest shareholder of rice bran oil producer Emerald Oil Industries, has signed a three-year share purchase agreement with Dubai-based Safa Capital, seeking to sell its Tk400 crore ($47 million) worth of Emerald Oil shares. In the event of challenges in selling the shares, Minori has the flexibility to leverage them as collateral for a loan from the foreign investor, Safa Capital.
The anticipated funds from this agreement are earmarked for facilitating the expansion of Emerald Oil, a publicly traded rice bran oil producer that Minori took charge of after the defaulting sponsors abandoned the factory, leading to a six-year hiatus. Minori’s chairman, Miya Mamun, indicated that the funds would be crucial for various purposes, including settling defaulted loans from the original sponsors, such as the 30% shares held by Basic Bank.
Mamun, who is also a director of Emerald Oil, explained that the funds would play a crucial role in acquiring shares, supporting the company’s growth, and investing in undervalued shares of listed companies in Bangladesh. He highlighted the significance of the deal for the country’s financial markets, emphasizing the need for stronger foreign currency inflows.
Under the terms of the agreement, Minori would pay Safa Capital a commitment fee of 3% of the committed sum of Tk400 crore. Additionally, the parties aim to trade approximately seven times the shares compared to the daily average traded during the reference period.
As of now, Minori holds more than 39% of Emerald Oil shares, with approval granted by the securities regulator a year ago for Minori to subscribe to 3.15 crore new shares at a face value of Tk10 each. These new shares, constituting more than 30% of the total, are subject to a three-year lock-in period.
While the new shares are yet to be credited to Minori, they are expected to be a valuable asset once dividends are disbursed, according to Miya Mamun. However, Minori has the option to immediately sell over 5% of its Emerald Oil shares, with a public announcement, and the flexibility to buy more shares from the market and sell them to the foreign investor.
The securities regulations mandate a minimum shareholding of 2% for each shareholder director and a collective ownership of 30% by sponsors and directors. Last month, Emerald Oil Industries obtained regulatory approval to use sponsor-director shares, exceeding the minimum regulatory threshold of 30%, as collateral for loans, providing additional financial flexibility.
Despite the positive trajectory, Mamun highlighted that the company’s factory in the Sherpur district has experienced a production slowdown in the last one and a half months due to an acute shortage of gas. However, plans are in place to import a new husk boiler line, with coal as the primary fuel, to resume production by mid-March, doubling daily capacity to nearly four lakh tonnes.
Emerald Oil shares, with a face value of Tk10, closed 3.87% higher at Tk75.2 apiece on the Dhaka Stock Exchange on Sunday. The company, known for its Spondon branded rice bran oil, began its market presence in 2011 but went off production in 2017 following a loan scam involving its original sponsors. Minori’s involvement in 2021 led to the resumption of production and profitability for Emerald Oil.
Reviewing the U.S. Stock Markets, the Nasdaq Composite, recorded a decent loss of 1,023 points, reaching a closing value of 16,690 points by the end of the week. Similarly, the S&P 500 index showed a positive trend, losing 240 points to settle at 5,408 points. Meanwhile, DJIA Index experienced a notable hike, adding 1,218 points during the week and concluding at 40,345 points after a week of gaining.
In contrast, Russell 3000 Index saw a loss in week performance, with a slight drop of 141 point to reach 3,077 points by the end of the week.
Moving to Russell 2000 Index, demonstrated a notable lost of 126 points, ending the week at 2,091 points.
In the Outgoing week, the European stock market displayed a mixed performance.
Here is the data on the weekly performance of the European Stock Market, The STOXX Europe 600 index, which is considered a leading benchmark for the European market and covers approximately 90 percent of the market capitalization across 17 countries, reported a loss of 18.49 points to close at 506.56.
The United Kingdom’s FTSE 100, one of the most widely followed indices in Europe, also showed a significant drop, losing 195 points or finishing the session at 8,181.
In Germany, the DAX 30 index, added by 605 points to reach 18,301, while France’s CAC 40 decreased by 278 points to stop at 7,352 at the end of the trading day.
Italy’s FTSE MIB, which covers the top 40 stocks traded on the Milan Stock Exchange, decreased by 1,081 points to 33,291. However, Spain’s IBEX 35, lost by 228 points, to close at 11,173.
A review of South Asian stock markets shows that India’s Bombay Stock Exchange (BSE) index BSE Sensex has lost 1,182 points during the week. At the end of the week, the index stood at 82,365 points. On the other hand, the Nifty-50 index of the country’s National Stock Exchange dropped by 383 points last week. At the end of the week, the index stood at 24,852 points.
Pakistan Stock Exchange Index ‘KSE 100’, added 459 points last week. After a week of losing, the index settled at 79,002 points.
On the other hand, The Sri Lankan stock market index loss, and the Colombo Stock Exchange index ‘ASPI’ decreased by 94 points in a week. After a week the index settled at 10,775 points.
Bhutan’s stock market index ‘BSI’ dropped by 9 points hence the index stood at 1,500 points throughout the whole week. Nepal’s ‘NEPSE’ lost 22 points, therefore the index stands at 2,727 points.
Hence Dhaka Stock Exchange: The benchmark index ‘DSEX’ lost by 75.77 points or 1.31 percent, in the outgoing week. At the end of the week, the index stands at 5,728 points.
