Two listed firms merge next month
Two listed companies under the same ownership will merge next month as part of a new business strategy, a move market experts say will strengthen the country's stock market.
Tripti Industries, which has been in the red for the last five consecutive years, will be amalgamated with Olympic Industries, officials said. The name of the new company will be Olympic Industries, the officials added.
Dhaka Stock Exchange Chief Executive Officer Salahuddin Ahmed Khan said with the consolidation, shareholders of Tripti will be benefited.
Commenting on the issue, Yawer Sayeed, managing director and chief executive officer of AIMS of Bangladesh, said, “It's not new, it's an internationally accepted concept.”
Olympic can be more cost effective through using the resources of Tripti, Sayeed observed.
“We will utilise the resources of Tripti Industries, which is now a poorly performing company, for businesses growth of Olympic Industries that is a well performing company,” said a high official of Olympic Industries.
Moreover, he said, the shareholders of Tripti, who are not getting any dividends, will also be benefited. Olympic declares dividends regularly.
Chairman of both Tripti and Olympic is Mohammad Bhai. Members of the two boards are also same.
Tripti Industries, which manufactures edible oil, vanaspati ghee and ballpoint pen, incurred a loss of Tk 1.79 crore in 2006-07, while the loss was Tk 1.71 crore in 2005-06 and Tk 2.03 crore in 2004-05.
On the other hand, Olympic Industries, which produces biscuit, candy and dry-cell battery, made a net profit after tax of Tk 3.25 crore in 2006-07, while the profit was Tk 2.41 crore in 2005-06 and Tk 1.27 crore in 2004-05.
During the three fiscal years, Olympic gave 11 percent, 13 percent and 11 percent dividends to the shareholders.
One Olympic share will be offered for every 5.79 Tripti shares, said another official of Share Department of Olympic Industries.
“An extra-ordinary general meeting (EGM) will be held next month to this effect,” he said, adding that their main target is to become a good performing company through a merger between a weak company and a strong company.
Presently, shares of Olympic Industries, which was listed in 1989, are being traded under A category that reflects the company is regularly holding annual general meetings and declaring dividends.
On the contrary, shares of Tripti Industries, which was listed in 1986, are being traded under Z category that shows the company performs poorly.
Yesterday on the Dhaka Stock Exchange each Olympic share was traded between Tk 400 and Tk 435 against the face value of Tk 100, while each Tripti share was traded between Tk 54.75 and Tk 55.75 against the face value of Tk 100.
The amalgamation is not a new phenomenon in the country. Earlier in August of 2006, Beximco Group merged its four textile units into one unit.