FE REPORT
The board of directors of IFIC Bank has decided to raise Tk 10 billion through issuance of perpetual bonds to boost the capital base of the bank.
The bank will issue perpetual bond for raising funds as additional Tier-1 capital, to support the bank's BASEL-III norms complying with Bangladesh Bank (BB) guidelines on risk based capital adequacy, said the bank in a filing with the Dhaka Stock Exchange (DSE) on Sunday.
A perpetual bond is a fixed income security with no maturity date and is often considered a type of equity rather than debt. These types of bonds are not redeemable but instead provide a never-ending stream of interest payments.
The bond will be issued through private placement basis for Tk 9.0 billion and on public offer basis for Tk 1.0 billion in line with the latest directive of Bangladesh Securities and Exchange Commission in this regard issued on 23 May, 2021.
According to the BSEC's latest directive, if an issuer intends to raise debt capital through issuance of perpetual bond, it shall make public offer at least 10 per cent of its intended offer. The directive also include that perpetual bonds which will be issued by the banks must be listed on the bourses through the direct listing method.
Previously, the perpetual bonds were issued through only private placement and they were not tradable at the stock market.
The bond issue is subject to approval of the shareholders of the bank, concerned regulatory authorities - Bangladesh Bank and stock market regulator.
The IFIC Bank will take the final decisions after holding an extraordinary general meeting (EGM), according to the filing.
The EGM will be held on August 26 at 11:00am using the digital platform. The record date for EGM is set on July 13.
Each share of the bank, which was listed on the DSE in 1986, closed at Tk 11.90 on Sunday, gaining 0.85 per cent over the previous day.
Its shares traded between Tk 8.60 and Tk 17.90 in the last one year.
The bank's first quarter (Q1) consolidated earnings per share (EPS) stood at Tk 0.46 for January-March 2021 as against Tk 0.44 for January-March 2020.
Its consolidated net operating cash flow per share (NOCFPS) was negative Tk 5.93 for January-March 2021 as against Tk 0.83 for January-March 2020.
The consolidated net asset value (NAV) per share was Tk 17.57 as on March 31, 2021 and Tk 16.71 as on March 31, 2020.
The company disbursed 5.0 per cent stock dividend for the year ended on December 31, 2020.
Its paid-up capital is Tk 40 billion, authorised capital is Tk 17 billion and the total number of securities is 1.70 billion.
The sponsor-directors own 4.11 per cent stakes in the bank, while the government owns 32.75 per cent, institutional investors own 23.94 per cent, foreign investors 0.72 per cent and the general public 38.48 per cent as of May 31, 2021, the DSE data shows.
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