Dhaka, Bangladesh (BBN)-The High Court (HC) has issued a stay order on the initial public offering (IPO) subscription of Doreen Power Generations & Systems for six months, said an official disclosure on Wednesday.
“DSE has received an e-mail from the issue manager of Doreen Power along with a lawyer’s certificate which states, among others, the following: “…… after hearing their lordships has pleased to do issue a rule nisi calling upon the respondents and the stay operation has been passed for six months in respect of issuance of the 20 million ordinary shares of the Doreen Power,” said the disclosure.
Sources said a division bench of the HC, comprising Justice Zubayer Rahman Chowdhury and Justice Md Khasruzzaman, issued the order of stay following a writ petition filed by two general investors.
The challengers are Sheikh Enamul Kabir and Md Rafiqul Islam, who stood against the Bangladesh securities regulator’s approval for approving IPO subscription of the power-sector firm.
Meanwhile, the IPO subscription of Doreen Power started on February 8 and was supposed to continue till February 16.
Advocate Md Taufiqul Islam, the lawyer for the petitioners, said the HC also issued a rule for the respondents to explain why the regulatory approval for the IPO proposal should not be declared illegal.
“Doreen Power has liabilities worth BDT 6.68 billion. The writ petition also challenged the illogical premium approved for the company’s shares,” said advocate Islam.
The Bangladesh Securities and Exchange Commission (BSEC) approved the IPO proposal of Doreen Power on November 30, 2015.
Under the fixed-price method the company went public to raise a fund worth BDT 580 million by offloading 20 million shares at an offer price of BDT 29, including a premium of BDT 19 for each ten-taka share.
As per the IPO prospectus, the company will utilise the funds to set up power plants for its two subsidiary companies and repay bank loans.
In accordance with the audited financial statement for the year that ended on June 30, 2014, the company’s net asset value (NAV) is BDT 34.87 per share.
The company earning per share (EPS) is BDT 3.19 in accordance with the weighted average of last five years.
Alliance Financial Services and ICB Capital Management have been appointed issue managers of Doreen.