DSE finds AFC Agro’s factory closed, adding to growing list of non-operational firms

An inspection team from the Dhaka Stock Exchange (DSE) recently visited the factory premises of AFC Agro Biotech Limited only to find its production and operations completely shut down. 

The premier bourse published this finding on its website on Thursday.

According to existing securities laws, listed companies are legally obligated to immediately inform their investors and the regulators if factory operations are suspended. 

However, AFC Agro Biotech failed to provide any such material information to the stock exchange regarding its closure. 

Following this production halt, the total number of non-operational listed firms on the DSE has risen to 34.

The agro-based bio-pharmaceuticals and bio-chemicals producer has been plagued by operational and financial delays. AFC Agro last published its financial statements for the 2021-22 fiscal year, during which its board recommended a meager 0.50% cash dividend. 

For that fiscal year, its earnings per share (EPS) stood at Tk0.22, up from Tk0.15 in the previous year, while its net asset value per share (NAVPS) was recorded at Tk18.19 as of 30 June 2022. In the preceding 2020-21 fiscal year, the company paid a 0.50% cash dividend solely to general investors, excluding sponsor-directors.

Adding to the regulatory non-compliance, the company has also stopped submitting its mandatory monthly shareholding reports since March 2024. According to its last submitted report from February 2024, sponsor-directors hold a 27.84% stake, institutional investors own 34.11%, and general investors hold the remaining 38.05% of its 11.52 crore total shares.

The company’s financial distress was evident earlier in 2020 when the Bangladesh Securities and Exchange Commission (BSEC) permitted AFC Agro to issue a Tk100 crore non-convertible zero-coupon bond to repay bank loans and secure working capital. However, BSEC sources revealed that the company completely failed to raise the funds due to a total lack of bond subscriptions.

Alarmingly, AFC Agro’s sister concern, Active Fine Chemicals Limited, is facing an identical fate. A prior DSE investigation team found Active Fine’s factory closed as well. Once celebrated as the country’s pioneer local producer of active pharmaceutical ingredients (APIs) with immense potential for the booming drug sector, Active Fine Chemicals has been in a steady decline and has failed to publish any financial disclosures since March 2023.