Fu-Wang Foods shares hit two-year high

Stocks of Fu-Wang Foods surged to a two-year high yesterday amid optimism among investors after the market regulator allowed Minori Bangladesh Ltd to invest in the food processing company.

The company's stocks soared to Tk 23.9 yesterday, up 9.6 per cent from Tk 21.8 the day before, after the Bangladesh Securities and Exchange Commission (BSEC) approved the transfer of 84.42 lakh, or 7.6 per cent, of the shares held by three directors of Fu-Wang Foods including its managing director to Minori, a Japanese agricultural and food processing company.

The BSEC allowed the purchase of shares at Tk 8.4 crore at the face value of Tk 10 each apart from permitting the buyer to nominate one or more individuals as directors on the board of Fu-Wang Foods to maintain uninterrupted holding of shares by directors.

The regulator also imposed a condition that Minori Bangladesh would have to inject Tk 20 crore of fresh funds as share money deposit or loans to enable Fu-Wang to regularise its bank and other liabilities as well as ensure smooth operation of the food processing company, Fu-Wang said in a filing with the Dhaka Stock Exchange (DSE).

The company said it will have to obtain consent from the BSEC to raise capital against share money to comply with the requirement that board of directors must have a minimum 30 per cent stake to hold directorship -- a move the BSEC took earlier with the objective to protect the interest of general investors.

Listed with the DSE in July 2000, three years after it was founded by Taiwanese investors, Fu Wang Foods makes and markets cake, bread, biscuit, toast, snacks and instant noodles.

Although it had a good beginning, the company, which was later taken over by local investors, fell into trouble for operational inefficiency, absence of proper planning and failure to take timely decisions, insiders said.

Its shares fell as low as Tk 10.3 on March 18, 2020, lowest in two years.

Fu-Wang did not declare any dividend in the 2020-21 financial year ending in June. Its shares began to rise on December 26 last year.

"We hope to do good business as new management is joining us. Investors have also taken the development positively," said Md Sharif Al Mahmood, company secretary of Fu-Wang Foods.