Bangladesh Export Import Company (Beximco) Limited on Wednesday secured the regulatory approval to originate its Tk3,000 crore Sukuk, Islamic asset-backed securities.
The Bangladesh Securities and Exchange Commission (BSEC), following its meeting on Wednesday, said the Sukuk would be a green one as the company would spend the money on eco-friendly infrastructures.
The listed company will privately place Sukuk units worth Tk2,250 crore, of which Tk750 will be offered to the company’s existing shareholders, and Tk1,500 crore to other investors. Besides, Sukuk units worth Tk750 crore would be floated in an initial public offering (IPO).
The company would expand its textile unit alongside implementing two solar power projects under its power division with the Sukuk money.
The Sukuk units having a face value of Tk100 each will have to be subscribed in a lot of 50 units or multiples that would cost an investor at least Tk5,000.
Investment Corporation of Bangladesh is the trustee of the Sukuk, while City Bank Capital Resources Ltd and Agrani Equity and Investment Ltd are jointly working as the issue managers.
BSEC has approved the first-ever Sukuk by the private sector in Bangladesh. Earlier this year, the Bangladesh Bank issued a Tk8,000 crore government Sukuk for a safe water project.
The Bangladesh capital market, historically limited within the equity arena, is embracing debt securities to catch up and cater to the economy with long-term financing needs in a way so that bonds can reduce pressure on commercial banks that borrow for short-term and lend for much longer-terms.
With the interest rate coming down, debt securities that offer higher than average interest are attracting investors. But the lack of a vibrant secondary market is still discouraging a large number of them.
The regulators are also working on an effective and vibrant secondary market for bonds, and observers believe that the efforts would prove successful in the coming days as the deadlocks are being removed gradually.
Investors would get at least 9% annual profits and can exercise their option to convert the investment to Beximco Ltd shares later.
Sukuk, originated by Beximco, will be issued by a trustee and the trustee would look after all the underlying assets to provide annual profits to investors.
The trustee will also be responsible to ensure the pre-determined redemption or conversion processes of the five-year Sukuk.
Courtesy – https://www.tbsnews.net/