Walton Hi-Tech Industries Ltd sought time up to three years to comply with the September 2021 regulatory order to offload more of its sponsors-held shares to ensure at least 10% free-float shares.
Free-float shares are listed company shares held by external shareholders who do not need any prior declaration before trading company stocks.
Walton in a letter to the Bangladesh Securities and Exchange Commission (BSEC) last month sought an opportunity to offload further sponsor shares in phases within an extended period of three years to avert any adverse impact on its stock price.
The listed home appliances giant proposed to transfer 5% of the company shares to persons or entities who are not its sponsors or directors within the next one year, instead of offloading the stake in the open market.
As part of the planned share transfer, Walton sought BSEC's permission to donate 1% of the company shares to a trust.
The company which has only 0.97% free-float shares right now wants to offload 4.03% shares, now held by sponsors, in phases within the next three years.
The company also requested a waiver from the mandatory prior announcements before actuating the share offloading and transfer plan it proposed to comply with the regulatory order.
The BSEC on 12 September last year ordered Walton Hi-Tech Industries, Berger Paints Bangladesh Ltd, and the Investment Corporation of Bangladesh (ICB) to ensure a minimum of 10% free-float shares within a year through offloading sponsors-held shares.
However, in the following trading session, each of the companies witnessed sharp falls in their stock prices as investors feared a sudden bulk supply of the company shares that might need over Tk5,000 crore to absorb the said supply.
ICB which was in need to ensure offloading of 6.81% of the company shares has written to the Ministry of Finance informing it about the regulatory order and is waiting for the government's decision as the government and some of its financial entities are the sponsors and directors of the state-owned investment firm.
As one of ICB's sponsor-director, the Bangladesh Development Bank is selling some of its ICB shares to comply with the ICB Act, ICB's free float shares have slightly increased in recent months.
Meanwhile, Berger Paint Bangladesh's foreign sponsors are pursuing their plan to comply with the BSEC order in time and the company is yet to make any prayer, to date, for any waiver or time extension, according to sources.
Berger sponsors need to offload 5% of the company shares.