BEXIMCO’s BDT 30 billion Sukuk gets affirmation

Summary: 

Beximco Limited got the final approval from the Security regulator of the Bangladesh Securities and Exchange Commission for the issuance of green Sukuk Bond worth Tk 30 billion to finance construction goals and equipment procurement. The BSEC approved the proposal on 24th June, Wednesday based on some conditions.

Content:  

Bangladesh Export-Import Company Limited filed documents for the issuance of Islamic Shariah Compliance Sukuk was worth 3000 crores on April 29. The company had filed two applications to the Bangladesh Security Zone and Exchange Commission regarding the issuance of the bond of the debt securities worth Tk 2250 crore and the rest Tk750 crore with a public offer.

A Sukuk is an Islamic financial certificate but commonly refers to the Islamic equivalent of bonds, similar to a Treasury bond. It is designed to generate returns in compliance with Islamic finance principles. According to the filling, the face value of each Islamic bond to be issued by BEXIMCO will be Tk 100, and the minimum subscription size will be Tk 5,000. The tenure of the Sukuk is five years.

After almost two months, the security regulator of BSEC approved their proposal that is to issue asset-backed Green-Sukuk bonds after they had submitted the necessary documents. They submitted trustee registration certificate, BSEC-approved trust deed and subscription agreement to the BSEC within five working days of receiving the letter of intent which was decided in the commission meeting presided over by its chairman Shibli Rubayat-ul-Islam.

The BSEC for the first time has approved a Sukuk in the country. This will be the largest Sukuk issuance in the private sector.

Of Tk 30 billion, only Tk 7.5 billion will be raised through IPO and the maximum part of  Tk 22.50 billion will be raised through private placements from the existing investors.

However, these shares are convertible. Investors will have the option to convert it into ordinary shares within five years. But they can convert a maximum of 20 percent of the total each year. If they convert the shares, the conversion would eventually lead to an increase in the paid-up capital of Beximco. It is feared that might weaken the listed companies’ asset and earnings per share. The existing paid-up capital of Beximco is worth 876.31 crores.

The Sukuk fund will be employed for the expansion of its business mainly in the textile unit and solar projects of Teesta Solar and Korotoa Solar, two subsidiaries of Beximco Power Company, and refinancing of machinery and equipment required for expansion of Beximco’s textile division.

Investment Corporation of Bangladesh is the trustee, and City Bank Capital Resources Limited and Agrani Equity and Investment Limited are the issue manager of the Sukuk. Essentially, the trustee is the independent referee for the players in the Sukuk transaction flow and acts as the watchdog for the Commission, to which it reports any breach of statutory provisions by either the borrower or guarantor

Article Source: The Financial Express, Newagebd

Picture source: https://www.newagebd.net/article/137217/beximco-files-application-with-bsec-to-issue-tk-3000cr-sukuk

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