The Bangladesh Securities and Exchange Commission (BSEC) has allowed the Chittagong Stock Exchange (CSE) to sell 25% of its stake to ABG Limited - a concern of the Bashundhara Group - for Tk238 crore.
Earlier, Bashundhara expressed interest in becoming a strategic partner of the CSE, and sent a proposal in this regard to the port city bourse.
The CSE forwarded the proposal to the BSEC in August this year, and the commission gave its approval at a meeting yesterday.
According to sources at the CSE, ABG Limited will buy 15.86 crore shares at Tk15 each.
The BSEC said in a press release that it has approved the strategic partnership on some conditions, one of which is to hold an extraordinary general meeting (EGM) to secure shareholder approval as required by the securities law.
Bashundhara Group's Managing Director, Sayem Sobhan Anvir, is also the managing director of ABG Limited. The company applied to the BSEC to establish a commodity exchange in May, but the commission recently turned the application down.
Sources said Bashundhara's top officials also held a meeting with the BSEC recently where they said ABG Limited is in a joint venture with a USA-based organisation for the necessary technical support to manage a stock exchange.
According to the Demutualisation Act, there is an obligation to sell 60% of blocked shares to strategic, institutional, and general investors.
Of that, 25% of the stock exchange's total shares have to be sold to strategic investors.
After that, the remaining 35% has to be sold to general and institutional investors through the initial public offering (IPO) process.
40% of the shares are owned by members of the stock exchange or brokerage firms.
Since 2016, the regulator has been extending the time to look for strategic investors every year based on company applications.
Earlier, in September 2018, the Dhaka Stock Exchange (DSE) transferred 25% of its shares to strategic investors – the Chinese consortium of Shenzhen Stock Exchange and Shanghai Stock Exchange – for Tk962 crore, with each share priced at Tk21.
The CSE was established in 1995. Currently, its paid-up capital is Tk634.52 crore and the number of shares is 63.45 crore. It paid a 4% cash dividend to its shareholders for financial year 2020-21.
As of June 30, last year the CSE's net profit was Tk28.34 crore, which was Tk31.88 crore in the previous year.
For the same time frame, its earnings per share (EPS) stood at Tk0.45 and net asset value per share at Tk11.75.