National Tea Company today said it had extended the subscription period to raise Tk 280 crore in capital, as it did not receive the expected response from investors and its shareholders during the initial period.

Stock investors attributed the lack of interest among general shareholders to the company's significant losses.

The new subscription period will begin tomorrow and continue until March 27, according to a disclosure on the Dhaka Stock Exchange. 

The state-run, publicly listed tea company received approval in 2023 from the Bangladesh Securities and Exchange Commission (BSEC) to raise Tk 280 crore through the issuance of placement shares to support business growth, strengthen working capital, and repay bank loans. 

Placement refers to the sale of securities to a select group of investors, either publicly or privately. 

The company was permitted to issue 2.34 crore shares at an issue price of Tk 119.53 each, while the face value remains Tk 10. 

Of these, approximately 1.24 crore shares will be issued to the government to retain its controlling stake, as it currently holds 51 percent of the company.

Around 13.80 lakh shares will be allocated to other directors, while 95.39 lakh shares will go to shareholders other than directors and sponsors. 

Shares of National Tea fell 0.40 percent to Tk 176.50 at the Dhaka Stock Exchange. 

NTC initially announced the subscription for placement shares in July 2023, but it was postponed following a BSEC directive in response to a court order. 

The company later received clearance after another court ruling and invited investors to subscribe in mid-June 2024 for two months. 

However, only 19.38 percent of the targeted capital was raised during that time, said AK Azad Chowdhury, company secretary of NTC. 

"Due to political instability, we were unable to attract sufficient investors. The government shareholders have yet to subscribe," he said. 

Brokers, however, cited NTC's poor financial performance as the primary reason for the lack of investor interest. 

The company did not declare any dividends for the financial year 2024, leading the DSE to downgrade it to the Z category—the lowest classification for poorly performing listed companies. Its losses also widened. 

NTC reported a loss of Tk 107 per share in FY24, up from Tk 96 per share the previous year. 

Chowdhury expressed hope that securing the required capital would help the company recover and return to profitability. 

Amid financial struggles, NTC also faced difficulties in paying wages to tea workers, leading to repeated strikes last year. 

The company operates 16 tea gardens across the country, employing around 17,000 workers, with an additional 30,000 individuals dependent on their earnings.