Sonali Paper comes back to main market

FT ONLINE 

The securities regulator has again allowed Sonali Paper and Board Mills to come back to the main markets from over-the-counter (OTC) despite the bourses' denial. 
 
Earlier, the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange rejected the regulator's approval to allow Sonali's share to be traded in the main market. 
 
The reason being that the company did not have a positive net current asset in the last three financial years, a condition that has to be met to get listed on the bourses.
 
Sonali mainly produces white and printing paper, liner paper, simplex paper, and duplex paper. Bashundhara Paper Mills, Hakkani Pulp and Paper Mills, Karnaphuli Paper Mills, and Magura Paper Mills are its competitors.
 
The approval letter to the company would be issued soon, said officials of the Bangladesh Securities and Exchange Commission (BSEC).
 
Earlier the regulatory body relieved the company of complying with five sections of listing regulations in bourses along with exemption from two directives of the BSEC.

So, the company sought a waiver, which the regulatory body approved, Rashedul Hossain Imon, secretary of the company, confirmed this. "We are waiting for the approval letter to take our next course of action." 
 
The company's current paid-up capital is Tk15.13 crore, but it has to be doubled, another listing condition to trade shares in the main trading board.
 
The demand for locally manufactured papers is rising, and Sonali is trying to cater to this demand.
 
The company produces different GSM (Grams per Square Metre) white writing and printing paper in its two units. A total of 454 employees are currently working for Sonali. 

At present, the company's production capacity is 45,000 kg per day and 35,000 tonnes per year. 
 
The DSE launched its OTC in October 2009, with 51 listed companies, including Sonali. 
 
These companies were moved from the main board to the OTC because of their underperformance, failure to hold shareholders' annual general meetings for years, and for not being able to convert their shares into electronic ones instead of paper certificates. 
 
In the second phase, another 29 companies were sent to the OTC. Later 12 of them returned to the main market after complying with the rules and by improving performance.
 
Sonali started business in 1977 and got listed at the DSE in 1985.

Younus Group took over Sonali in 2006 after years of poor performance. 
 
The new directors of Sonali have been trying to bring their business back on track. Now, the company has a reserve and surplus of Tk488.14 crore, and its paid-up capital is Tk15.13 crore. 
 
Last year the company's board of directors recommended a 10 percent stock dividend for its shareholders when its earning per share was Tk4.19, and net asset value per share was Tk336.90.