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Stocks of Bangladesh Submarine Cable Company Ltd (BSCCL) jumped yesterday after the state-run enterprise announced that it is going to issue shares to the government against its investment at a market price instead of face value.
BSCCL shares rose 8.81 per cent to Tk 207 on the Dhaka Stock Exchange after the disclosure that its board decided to issue 1.48 crore shares against Tk 166 crore share money deposit.
Stock investors had feared if the company issues the shares at face value, it would impact the company’s earnings per share in the coming years, said Md Moniruzzaman, managing director of IDLC Investments.
But it decided to issue shares at much higher than the face value. Moreover, it is going to issue shares at the price of the last day of the year when the government invested the fund.
“It is a good sign,” Moniruzzaman said, adding because the new share issuance, its dilution would be only 8.74 per cent.
Dilution occurs when a company issues new shares that results in a decrease in the existing stockholders’ ownership percentage.
The submarine cable company received Tk 140 crore from the government in the financial year 2015-16 under a project to install and establish the second submarine cable. In 2016-17, the company got Tk 26 crore for the same project.
Against the fund injection, the company is now going to issue the shares to the government.
To set an appropriate share price, the government had appointed ICB Capital Management for an independent recommendation.
(TDS)
