Tens of thousands of investors who bet on United Airways are now under a mountain of uncertainty after the lone listed private carrier ground to a halt for cash crisis.
The airline, which disclosed the news of its operational suspension at a press briefing on Wednesday night, did not give any posting on bourses website and trading server, deepening worries of loss of investment among general shareholders.
Subsequently, many of them released their stakes even with losses, creating a sell pressure on the trading board of Dhaka Stock Exchange. This pulled down the prices of United Airways stocks by 7.63 percent.
One of them was Anayat Ullah, who, fearing a further fall in prices in the coming days, sold 1.7 lakh of his shares of the private carrier.
“I don't know whether the company can come back in operation, so I sold the shares at a loss of Tk 0.50 per share.”
Each United Airways share closed at Tk 10.90 on the premier bourse yesterday. During the opening hours of trade, the price dropped to Tk 10.70, the lowest for the day. The 'circuit breaker' did not allow the stock to decline below that figure.
The price of a stock cannot increase or decrease by certain percentage on a trading day as per the circuit breaker rules of the DSE. In the case of United Airways, the share could decline by 9.23 percent at most.
Shawkat Hossain, another investor, said the news of the airline's operational suspension made him worried about his investment.
“I came to know about the suspension through media reports -- nothing was posted either on the trading server or the exchange's website.”
If the airline cannot resume operations immediately, the investors will lose their confidence in it, he said.
“It will be a disaster for investors like me.”
Despite the slump in price, the huge transaction of United Airways shares showed that there were optimistic investors too, who took positions expecting resumption in operations.
More than 2.75 crore shares of the carrier, which was listed on the stock exchanges in 2010, were traded, generating a turnover of Tk 29.82 crore. “I think it's a temporary suspension and am hoping that the airline will resume its operations soon,” said Mizanur Rhaman, an investor who bought the company's shares seeing the fall in price as an opportunity to take positions.
General investors hold 74.37 percent shares of United Airways, while institutional investors 17.19 percent and the sponsors and directors 8.44 percent.
Meanwhile, the DSE yesterday sent a letter asking the private carrier to inform the bourse about the suspension, which it was supposed to as per securities rules.
“The company did not inform us anything about the suspension. We saw the news on the media,” said Swapan Kumar Bala, managing director of the DSE, adding that they have informed the regulator and requested it for the next course of actions as per securities laws.
An official of United Airways said the person responsible for it had resigned on Monday. “It's the duty of the company secretary but he was long gone. Who will do that now?”
Contacted, M Eliash, flight operations director of the troubled airline, said they have communicated with the chairman of the newly-formed board. “The chairman is coming to Bangladesh from Dubai and we are expecting a positive decision,” he said.
He announced the suspension of flights on Wednesday night, after the private carrier's new board failed to come up with plans to keep the company afloat.
In a separate move, Shahinoor Alam, acting managing director of the airline, on Wednesday night wrote to the Civil Aviation Authority, Bangladesh, informing it of the airline's intent to suspend operations.
Members of the new board, reconstituted on Monday after its founder Tasbirul Ahmed Choudhury was forced to resign, did not come to office for the next three days to steer the carrier out of crisis.
The abrupt flight suspensions also created sufferings for the carrier's passengers. Some 30-40 outbound passengers gathered in front of the counters of United Airways at the Hazrat Shahjalal International Airport yesterday. They also demonstrated there.
Set up in 2007, the airline has 11 aircraft -- two Airbus 310-325s, five MD-83s, three ATR 72s and one DASH-8 100.
It was operating domestic flights to Chittagong, Sylhet, Jessore, Cox's Bazar, Rajshahi, Saidpur and Ishwardi. On the international routes, it was flying to Dubai, Kuala Lumpur, Kathmandu, Kolkata, Jeddah, Bangkok, Muscat and Singapore.