The securities regulator has approved a proposal from non-listed Akij Food & Beverage Ltd to raise Tk 5 billion by issuing zero-coupon bonds, a move that reflects the growing reliance of large corporations on alternative financing instruments.
According to the regulatory approval, the bond will be unsecured, non-convertible, and fully redeemable. Unlike conventional bonds, this instrument does not offer periodic interest payments. Instead, the bond is issued at a discounted price and redeemed at full face value upon maturity, allowing investors to earn a fixed return.
The approval came at a meeting of the Bangladesh Securities and Exchange Commission (BSEC) last week, presided over by its Chairman Khondoker Rashed Maqsood.
The tenure of the bond will range from six months to 60 months, providing flexibility for investors with varying investment horizons.
The bond units will be issued through private placement to banks, non-bank financial institutions, insurance companies, institutional investors, and high net-worth individuals. Each unit will carry a face value of Tk 1 million, effectively limiting participation to large-scale investors.
Sena Insurance has been appointed trustee, responsible for safeguarding investors' interests and ensuring regulatory compliance, while North Star Investments (BD) will act as the fund manager.
Market insiders said amid tighter banking liquidity and relatively high borrowing costs, corporations are actively diversifying funding sources. Structured instruments such as zero-coupon bonds allow issuers to better align repayment obligations with long-term revenue generation.
The proceeds from the issuance are expected to support the company's expansion and operational financing needs, although detailed utilisation plans were not disclosed. This would be a cost-efficient way to fund expansion without immediate interest servicing burdens.
Founded in 2006, Akij Food & Beverage has grown into one of the country's leading beverage manufacturers. Its portfolio includes several well-known brands such as Mojo, Frutika, and Speed, which enjoy a strong market presence across segments.
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