Bangabandhu Bridge set to issue Tk 2.0b bonds
Saturday, 22 May 2010
Sheikh Shahariar Zaman
The Bangabandhu Bridge is set to raise funds by issuing bonds to finance its maintenance work in line with a government move to divest state-owned enterprises (SOEs).
The government took a decision on divestment in January and in line with the decision the finance ministry asked 26 SOEs to raise funds from the capital market.
The authority of the bridge over the mighty river Jamuna will initially raise Tk 2.0 billion (200 crore) by selling securitised bonds, said the finance director of the Bridge Division Sanwar Ali.
"The Bridge Division is going to hold a meeting soon to appoint the ICB as its issue manager to handle the whole process," he added.
The Bangabandhu Bridge run by Bangladesh Bridge Authority earned over Tk 2.0 billion in revenue in 2009, Mr Sanwar said.
After appointment of the issue manager, it is expected that the bonds will hit the market in two or three months, another bridge division official said.
The tenure of the bonds will be 15 years and the expected return is 12 per cent.
"We have to offer a better rate than of the current market to lure the potential investors," he said.
The bonds will be securitised, meaning that the bondholders will rest assured about getting their money back from the future revenue flow of the bridge, he explained.
Fifty percent of the bonds will be allocated for institutions and the rest for the public, he said.
The Division does not have much knowledge about issuing bonds and it counts on expertise of the ICB, which worked as issue manager for many state-owned enterprises, he added.
Another state-owned company, Bangladesh Shipping Corporation (BSC), will float shares to expand its fleet and construct a building in Dhaka.
BSC, a listed company, will issue 6.5 million shares at a face value of Tk 100 each and a premium through repeat public offer (RPO), said its secretary Golam Hossain.
The company, listed in 1977, has a paid-up capital of Tk 200 million and its shares are currently traded at Tk 4,085 each.
"It has already run an advertisement to appoint its issue manager and the appointment is likely to be completed by July," he said, adding the corporation is also going to appoint an agency for credit rating, based on which the premium rate of the company will be fixed.
The rating agency will do an analysis on the basis of its strength, weakness, opportunities and threat (SWOT) to get the real picture of the company, Mr Hossain said.
"The whole RPO process is expected to be completed by early next year," he said.
The company has 13 ships in its fleet and made a loss of Tk 102 million in 2009, after posting a good profit of Tk 466 million in 2008.
The global recession last year hit the industry hard as ship fare dropped from $10,000 to $2,500 during the period, he said, adding, "This year we expect to make up for the loss incurred in 2009."
The Bangabandhu Bridge is set to raise funds by issuing bonds to finance its maintenance work in line with a government move to divest state-owned enterprises (SOEs).
The government took a decision on divestment in January and in line with the decision the finance ministry asked 26 SOEs to raise funds from the capital market.
The authority of the bridge over the mighty river Jamuna will initially raise Tk 2.0 billion (200 crore) by selling securitised bonds, said the finance director of the Bridge Division Sanwar Ali.
"The Bridge Division is going to hold a meeting soon to appoint the ICB as its issue manager to handle the whole process," he added.
The Bangabandhu Bridge run by Bangladesh Bridge Authority earned over Tk 2.0 billion in revenue in 2009, Mr Sanwar said.
After appointment of the issue manager, it is expected that the bonds will hit the market in two or three months, another bridge division official said.
The tenure of the bonds will be 15 years and the expected return is 12 per cent.
"We have to offer a better rate than of the current market to lure the potential investors," he said.
The bonds will be securitised, meaning that the bondholders will rest assured about getting their money back from the future revenue flow of the bridge, he explained.
Fifty percent of the bonds will be allocated for institutions and the rest for the public, he said.
The Division does not have much knowledge about issuing bonds and it counts on expertise of the ICB, which worked as issue manager for many state-owned enterprises, he added.
Another state-owned company, Bangladesh Shipping Corporation (BSC), will float shares to expand its fleet and construct a building in Dhaka.
BSC, a listed company, will issue 6.5 million shares at a face value of Tk 100 each and a premium through repeat public offer (RPO), said its secretary Golam Hossain.
The company, listed in 1977, has a paid-up capital of Tk 200 million and its shares are currently traded at Tk 4,085 each.
"It has already run an advertisement to appoint its issue manager and the appointment is likely to be completed by July," he said, adding the corporation is also going to appoint an agency for credit rating, based on which the premium rate of the company will be fixed.
The rating agency will do an analysis on the basis of its strength, weakness, opportunities and threat (SWOT) to get the real picture of the company, Mr Hossain said.
"The whole RPO process is expected to be completed by early next year," he said.
The company has 13 ships in its fleet and made a loss of Tk 102 million in 2009, after posting a good profit of Tk 466 million in 2008.
The global recession last year hit the industry hard as ship fare dropped from $10,000 to $2,500 during the period, he said, adding, "This year we expect to make up for the loss incurred in 2009."