The Bangladesh Export Import Company Limited has filed documents with the Bangladesh Securities and Exchange Commission to issue Islamic Shariah compliant Sukuk worth Tk 3,000 crore.
The company filed the application on April 29 to get the BSEC’s nod, the commission officials said.
The company has filed two applications regarding the issuance of the bond that includes debt securities worth Tk 2,250 crore and public offer worth Tk 750 crore, they said.
This will be the largest Sukuk issuance in the country’s private sector.
The government recently issued the country’s first-ever Tk 8,000-crore Sukuk for a safe water supply project.
A Sukuk is an Islamic financial certificate, but commonly refers to the Islamic equivalent of bonds, and is structured 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.
Half of the Tk 3,000-crore fund will be raised through private placement and the Sukuk worth Tk 750 crore would be raised from the existing BEXIMCO shareholders.
The remaining Tk 750 crore would be raised through initial public offering in compliance with the BSEC public offer rules.
The profit rate of the Sukuk will be a minimum of 9 per cent per annum.
Sukuk holders will receive their periodical profits twice a year.
Investors will have the option of converting their investment in the Sukuk into ordinary shares of BEXIMCO within five years, but they can convert a maximum of 20 per cent of the total in a year.
The conversion would eventually lead to an increase in BEXIMCO’s paid up capital and that might dilute the listed company’s asset and earnings per share.
The existing paid up capital of BEXIMCO is worth Tk 876.31 crore.
If an investor does not want to convert the securities, they will get back the fund on maturity through a single payment.
This secured convertible asset-backed Sukuk will be issued (subject to the BSEC approval) for the purpose of construction of solar projects of Teesta Solar Limited and Korotoa Solar Limited, two subsidiaries of Beximco Power Company Limited, and for financing and refinancing of machinery and equipment required for expansion of BEXIMCO’s textile division.
BEXIMCO will form a Special Purpose Vehicle (SPV) with the regulatory approval of the BSEC.
The SPV will issue the Sukuk as it will look after the asset-investment relationship.
BEXIMCO has appointed City Bank Capital Resources Limited as the issue manager of the Sukuk.
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