BSEC rejects FSIBL rights offer application

Bangladesh Securities and Exchange Commission (BSEC) has rejected the First Security Islami Bank's application for rights offer.

The BSEC is not in a position to consider the application for approval of issuance of rights shares by First Security Islami Bank Ltd. (FSIBL), according to a filing posted on the website of Dhaka Stock Exchange (DSE) on Thursday.

The securities regulator refused to consider the bank's application due to its failure to form Nomination and Remuneration Committee (NRC), increase in number of outstanding shares for payment of stock dividend for the year 2021 and the bank's shares trading close to the face value in August 2022, according to the filing.

A rights offer refers to the issue of additional shares by a listed company to raise capital from the existing shareholders. The existing shareholders get the privilege to buy rights shares at a particular price within a specified timeframe.

On September 19, 2021, First Security Islami Bank decided to increase its paid-up capital through issuing rights shares.

Accordingly, the bank applied to the securities regulator for issuance of rights shares at a ratio of 1:2 (one right share for existing two shares) at an issue price of Tk 10 each.

The bank planned to raise capital of Tk 4.98 billion by issuing the right shares to cope with the business growth and strengthen the capital base as well as maintaining adequate capital as required by Bangladesh Bank.

Each share of the bank, which was listed on the capital market in 2008, closed at Tk 10.10 on Thursday, gaining 1.0 per cent over the previous day. Its shares traded between Tk 9.80 and Tk 15.80 in the last one year.

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