Subscription begins Jan 31
Thursday, 28 January 2010
Raihan M Chowdhury
The five-day long subscription of 'ACI 20% Convertible Zero Coupon Bonds', to be traded on the stock exchanges begins January 31.
"We hope trading of the instrument on the bourses will begin by March 15 after completing all formalities and we are offering some 'unique benefits' to the bondholders like tax exemption, convertibility option and capital gain on convertibility," Muallem A Choudhury, executive director (finance and planning) of ACI told the FE Wednesday.
Bonds are perceived as more secured and stable investment as investors are assured of guaranteed return.
With Tk 3,743 as per lot application money, the public offer size of the bond is Tk 400 million, while the face/redemption value of per lot is Tk 5,000.
Five bonds will be bundled together to make a lot with five different maturity dates ranging from one year to five years.
Explaining the maturity and redemption of the bond, the ACI executive said at maturity of each respective bond, redemption will be made in cash to the extent of 80 per cent and rest 20 per cent will be converted into ordinary shares of ACI Ltd.
"However, the bondholders will have the option to redeem cent percent in cash," the ACI official added.
No interest will be payable on periodical basis and bonds will be issued at discounted value but will be payable at the face value.
The difference between the issue price and repayment value will be redemption income to the bondholders.
The effective rate of return (discount rate) will be 10.5 per cent per annum excluding tax exemption benefits and capital gain from conversion.
ACI, one of the leading conglomerates of the country is issuing the bond to finance its business expansion plans under which ACI Pharmaceuticals will launch three new lines of medicine products.
Out of the total Tk 1 billion that will be raised through the bonds, 60 per cent is earmarked for the expansion scheme of the pharmaceutical division, while the rest 40 per cent will be utilised in repayment of its existing short-term debt.
Market insiders said more companies are in the pipeline to float such instruments as repayment would facilitate in bringing down current borrowings with banks and save the concerns from bearing the high interest rates attached with borrowing capital.
The five-day long subscription of 'ACI 20% Convertible Zero Coupon Bonds', to be traded on the stock exchanges begins January 31.
"We hope trading of the instrument on the bourses will begin by March 15 after completing all formalities and we are offering some 'unique benefits' to the bondholders like tax exemption, convertibility option and capital gain on convertibility," Muallem A Choudhury, executive director (finance and planning) of ACI told the FE Wednesday.
Bonds are perceived as more secured and stable investment as investors are assured of guaranteed return.
With Tk 3,743 as per lot application money, the public offer size of the bond is Tk 400 million, while the face/redemption value of per lot is Tk 5,000.
Five bonds will be bundled together to make a lot with five different maturity dates ranging from one year to five years.
Explaining the maturity and redemption of the bond, the ACI executive said at maturity of each respective bond, redemption will be made in cash to the extent of 80 per cent and rest 20 per cent will be converted into ordinary shares of ACI Ltd.
"However, the bondholders will have the option to redeem cent percent in cash," the ACI official added.
No interest will be payable on periodical basis and bonds will be issued at discounted value but will be payable at the face value.
The difference between the issue price and repayment value will be redemption income to the bondholders.
The effective rate of return (discount rate) will be 10.5 per cent per annum excluding tax exemption benefits and capital gain from conversion.
ACI, one of the leading conglomerates of the country is issuing the bond to finance its business expansion plans under which ACI Pharmaceuticals will launch three new lines of medicine products.
Out of the total Tk 1 billion that will be raised through the bonds, 60 per cent is earmarked for the expansion scheme of the pharmaceutical division, while the rest 40 per cent will be utilised in repayment of its existing short-term debt.
Market insiders said more companies are in the pipeline to float such instruments as repayment would facilitate in bringing down current borrowings with banks and save the concerns from bearing the high interest rates attached with borrowing capital.