Lub-rref struggling to pay declared money dividend

Lub-rref (Bangladesh) Ltd, a lubricant producer below the BNO model, is struggling to pay the advisable 10% money dividend for the fiscal 12 months 2021-22 because of a scarcity of liquidity.

To date, the corporate has managed to pay the dividend to 50% of the eligible shareholders.

The disaster has arisen because of injecting extra funds for uncooked supplies import for the corporate’s operations.

Not too long ago, the Bangladesh Securities and change fee (BSEC) shaped a three-member inquiry staff to conduct dividend points, utilisation of preliminary public providing (IPO) funds, the position of the board and administration, and related problems with the corporate since itemizing.

BSEC Extra Director Mohammad Siddiqur Rahman is the staff chief whereas Deputy Director Md Sirajul Islam and Assistant Director AKM Faruk Alam are members of the inquiry staff.

A senior official of the BSEC stated the fee has shaped the inquiry committee based mostly on complaints acquired from buyers who’re but to get a dividend for FY22.

The staff will evaluate all of the stipulated points inside 30 working days and submit the report back to the fee. 

Mofijur Rahaman, chief monetary officer of the corporate, instructed The Enterprise Commonplace the corporate is clearing its dividend step-by-step. To date, 50% of the eligible shareholders have been paid.

The corporate is paying the advisable dividend progressively because the lubricant producer is going through a liquidity disaster amid the present scenario, he added. 

Now, the corporate has to inject two or thrice the funds to import uncooked supplies as their costs are excessive globally. Moreover, the corporate shouldn’t be getting permission for big LCs because of the greenback crunch.

Because of this, the corporate is now in a position to function manufacturing at round 30% of its regular capability, he added.

He additional stated the corporate has already utilized to the fee to make use of its remaining IPO funds because the working capital to proceed its enterprise correctly, as it’s going through a scarcity of working capital.

The lubricant re-refiner and blender raised Tk150 crore in 2021. The corporate needed to buy equipment of Tk98 crore for enlargement. However the agency may solely use 46.1% of its equipment fund. Because of this, it couldn’t full its IPO challenge throughout the stipulated time.

Mofijur Rahaman stated the bottom oil refinery challenge value was Tk1,283 crore together with Tk150 crore IPO fund. Of this challenge, Tk900 crore was loans and Tk750 crore overseas loans which was supposed for use as LC for the challenge.

However because of the international disaster and native liquidity scarcity, these loans have gotten delayed. Because of this, it’s not doable to proceed with persevering with the IPO challenge now, he additional added.

Regardless of this example, the corporate posted 17% year-on-year revenue development within the third quarter of the present fiscal 12 months.

From January to March quarter 2023, the web revenue of the corporate stood at Tk6.74 crore, which was Tk5.76 crore in the identical interval of the earlier 12 months.

Its income got here down 8% to Tk33.75 crore from Tk36.56 crore in comparison with one 12 months in the past.

Lub-rref is the lubricant recycling pioneer within the nation that went public in 2021.

As of 31 Might 2023, sponsors and administrators collectively held 35.70%, establishments 24.84%, overseas buyers 0.06%, and most of the people 39.40% shares within the firm.

The final buying and selling worth of its shares was Tk35.10 every on the Dhaka Inventory Trade on Thursday.