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IFAD Autos to invest Tk 800m

The company signs land-lease agreement with BEZA

FE REPORT | August 23, 2021 00:00:00

IFAD Autos, a listed company, has decided to invest Tk 800 million to acquire 40 per cent shares of the IFAD Multiproducts, one of the sister concerns of IFAD Group, having a common management.

The said amount of investment is subject to approval by the shareholders/members in the forth coming general meeting of the IFAD Autos, the company said in a filing with the Dhaka Stock Exchange (DSE) on Sunday.

The amount shall be financed from company's own fund, said the filing.

IFAD Autos signed a land-lease agreement with Bangladesh Economic Zones Authority (BEZA) where the company will expand its manufacturing facilities at 30 acres of land at the Bangabandhu Sheikh Mujib Shilpa Nagar, Mirsarai, according to another filing.

Tanvir Ahmed, managing director of IFAD Autos and Md Ali Ahsan, executive member of BEZA signed the deal on behalf of their respective organisations at a BEZA headquarters in the capital on Thursday last.

IFAD Autos lease the land as rental basis for 50 years. The amount of rent is US$ 303,514.50 or equivalent Bangladeshi taka per annum.

In this regard, IFAD Autos has already paid a sum of Tk 51.56 million--equivalent to US$ 607,029 to the BEZA only as security deposit which is equivalent to two years annual lease rent for the demised land.

Tanvir Ahmed, managing director of IFAD Autos said they chose the Bangabandhu Sheikh Mujib Shilpa Nagar for expanding their manufacturing facilities because BEZA has been providing world-class facilities to investors there, a prerequisite for a business to thrive.

He informed that the company will start with motorcycle assembly, lubricant blending, and other light engineering factories within the shortest possible time.

Following the news, the company's share price rose 4.42 per cent to close at Tk 56.70 each on Sunday at the DSE. Its shares traded between Tk 38.50 and Tk 61.80 in the last one year.

The company has reported earnings per share (EPS) of Tk 0.51 for January-March 2021 as against Tk 0.48 for January-March 2020. In nine months, its EPS was Tk 2.17 for July 2020-March 2021 as against Tk 1.92 for July 2019-March 2020.

IFAD Autos, listed on the DSE in 2015, disbursed 9.0 per cent cash and 2.0 per cent stock dividend for the year ended on June 30, 2020. In 2019, it provided a 10 per cent cash dividend.

The company's paid-up capital is Tk 2.52 billion and authorised capital is Tk 3.0 billion, while the total number of securities is 252.95 million.

The sponsor-directors own 54.87 per cent stake in the company, while institutional investors own 26 per cent, foreign investors 0.83 per cent and the general public 18.30 per cent as on July 31, 2021, the DSE data showed.

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