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BSEC okays Chartered Life Insurance IPO

Life insurer to raise Tk 150m under fixed price method

FE REPORT | July 07, 2022 00:00:00

The stock market regulator has approved the initial public offering (IPO) proposal of Chartered Life Insurance Company which will raise a capital worth Tk 150 million under the fixed price method.

The approval came Wednesday at a meeting held at the office of Bangladesh Securities and Exchange Commission (BSEC) which was presided over by its chairman Prof. Shibli Rubayat Ul Islam, said a BSEC statement.

As per the BSEC approval, Chartered Life Insurance Company will offload 15 million ordinary shares at an offer price of Tk 10 each under the fixed price method.

The securities regulator has approved the company's IPO relaxing the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015: Rule 3(2)(p).

The BSEC gave the exemption to comply with the Insurance Development and Regulatory Authority (IDRA) Act, according to the BSEC statement.

The life insurer will utilize the IPO proceeds for buying government treasury bonds, stock market investment along with bearing the IPO expenses.

As per the actuarial valuation report ended on December 31, 2021, the company's total life fund grew to nearly Tk 352.17 million and total surplus was Tk 46.75 million.

Besides, the company has surplus Tk 4.50 million for giving dividend to its shareholders.

AAA Finance & Investments Ltd, Trust Bank Investment Ltd and AB Bank Investment Ltd are jointly working as issue managers of company's IPO process.

The life insurance company is not allowed to declare, approve or distribute any dividend before listing with the stock exchanges, as per the BSEC approval.

The company's paid-up capital is Tk 225 million and authorized capital is Tk 2.50 billion, according to its website.

Currently, 54 insurance companies -- both life and non-life --- are listed with the capital market.

Earlier, the stock market regulator in July 2021 rejected a Chartered Life's IPO application, citing its past consecutive losses and an accumulated loss as the insurer applied for Tk 150 million IPO based on its 2019 audited accounts.

The earnings per share (EPS) of Chartered Life had been negative for the four consecutive years up to 2019 and the Public Issue Rules do not allow any company to go public if it has accumulated and retained losses at the time of application.

Later, the company posted a positive EPS for 2020 and submitted an application with updated financial statements to comply with the insurance regulator's order.

Incorporated in July 2013, Chartered Life Insurance Company is engaged in a wide variety of insurance products such as individual life insurance policy and group life insurance policy.

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