Walton to offload more shares at regulator’s behest, extends losses for fourth day

Walton Hi-Tech Industries Limited will offload another 4.03 percent of its shares for public sale over three years.

Bangladesh Securities and Exchange Commission ordered Walton and two other companies on Sunday to release 10 percent of their shares within a year -- no more than 1 percent a month.

The regulator verbally approved Walton’s plea filed on Tuesday to extend the time for offloading the shares. The two other firms are the Investment Corporation of Bangladesh and Berger Paints Bangladesh.

All the listed firms, except Walton, ICB and Berger, have at least 10 percent of their shares on the stock market. Walton has 0.97 percent of its shares in the stock market.

“Our share price began dropping after the BSEC ordered us to release 10 percent of shares. Later, our board decided to discuss the issue with the BSEC,” said Md Rafiqul Islam, company secretary of Walton.

The Walton stock fell 4.1 percent on Wednesday, extending losses for the fourth day, while the country’s benchmark index advanced. The relative strength index on the stock was below 30, indicating it may be oversold.

Rafiqul Islam said on Wednesday that they spoke to BSEC Chairman Shibli Rubayat-Ul-Islam and received verbal approval to their plea.

Shibli Rubayat said Walton wanted time saying it would not be able to invest further for expansion if they offload the shares now. “We’ve asked them to file a written petition.”

“They said they would release 5 percent shares over the next three years. One year has passed. So they will have to offload 4.03 percent share within the next three years and another 5 percent afterwards.”

Sponsor directors of a company cannot sell their shares in the three years after listing. Walton was listed in 2020, so its sponsor directors have two more years left of the lock-in period.

But they agreed to release the 4.03 percent shares on the BSEC’s request, Walton said in a statement. They are planning to invest the funds from the sale to new industries.

It will decide about offloading another 5 percent of its shares upon discussions with the BSEC after three years.

Walton shares are traded in ‘A’ category. The price of a share of the company dropped to Tk 1,266.10 on Wednesday from Tk 1,319.6 on Tuesday. The company’s profit in 2020 was over Tk 7.26 billion. It gave the investors Tk 20 dividends per share.