Atlas Bangladesh Ltd sought the approval of the Bangladesh Securities and Exchange Commission (BSEC) for issuing new ordinary shares worth Tk11.48 crore to increase its paid-up capital.
The company applied to the BSEC last week and will proceed with its plan upon securing the approval.
In August 2019, the planning commission approved Atlas BD's plan of producing power-saving ceiling fans.
The estimated cost of the project was Tk36.19 crore. Of the amount, Atlas will pay Tk7.5 crore and the remaining Tk28.69 crore will be financed by the government.
Of this Tk28.69 crore, Tk17.22 crore will be considered as a term loan which Atlas will repay to the government at 5% interest within 20 years.
The remaining Tk11.48 crore will be converted into ordinary shares.
A top official of the company seeking anonymity said Atlas made this decision to diversify its business and minimise consecutive losses.
If the securities regulator approves the company's proposal, then the government's stake will increase from the existing 51%, he added.
The glory of Atlas Bangladesh Ltd in the two-wheeler industry started to fade away seven years ago.
The company, which was once the second-largest industry player, is now at the bottom of the list despite a nearly threefold growth in the local two-wheeler industry.
Atlas BD fell into dire straits in 2013 when its Indian partner Hero Honda ended their joint venture.
In fiscal 2014-15, Atlas BD's annual sales plunged below 1,250 motorcycles from nearly 37,000 in 2012-13 fiscal because the state-owned listed company failed to retain the big names.
Because of Honda's exit, Atlas also lost its older business from non-Indian plants, as the Japanese company itself started to market the brand in Bangladesh.
As the stock of Hero Honda and Honda bikes kept depleting, Atlas failed to find any Indian or Japanese brand to partner with.
In 2016, the company entered into a two-year contract with the Chongqing Zongshen group, one of the top five two-wheeler manufacturers in China, for importing, assembling, and marketing their motorcycles.
However, the market did not digest Zongshen motorcycles.
The company failed to sufficiently increase its annual motorcycle sales. In fiscal 2015-16, Atlas posted a net loss, which had never been witnessed before by the new generation of shareholders.
Analysts concluded that the partnership with Zongshen had backfired, as the company began losing money the same year it started selling the Chinese motorcycles.
In Bangladesh, the two-wheeler market is significantly dominated by Indian-made products, no matter where the brand originates from.
In May 2018, Atlas signed a contract with TVS Auto Bangladesh Ltd, a subsidiary of Indian two-wheeler manufacturer TVS Auto, to explore opportunities with a better product.
As per the contract, Atlas BD would buy motorcycle parts from TVS and then assemble them for selling to institutions.
In the July to December period of 2021, the company's net sales stood at Tk12.20 crore, which was Tk6.54 crore in the same period of the previous year.
During the period, it incurred a loss of Tk3.03 crore, and its per-share loss was Tk0.92.
The firm was listed on the Dhaka Stock Exchange in 1988.