The stock market regulator has approved Pragati Life Insurance's application to raise Tk 230.27 million through rights issue to cope with the business growth and strengthen the capital base of the company.
The rights issue is an offer of new shares by a company to its existing shareholders in proportion to the shares they already own and usually at a discount to market price.
The life insurer, which was listed on the Dhaka bourse in 2006, will issue more than 15.35 million rights shares of Tk 15 each, including Tk 5.0 as a premium to raise the said amount.
One rights share will be offered for existing one share, according to a disclosure posted the on the Dhaka Stock Exchange (DSE) website on Sunday.
The company has decided to raise paid-up capital by issuing rights shares to fulfill the regulatory requirement in line with the Insurance Act-2010.
The purposes of issuance of right shares are to cope with the business growth and strengthen the capital base of the company as well as fulfill the regulatory requirement.
The company will invest the rights offer amount in government treasury bonds, and in fixed deposits at banks and financial institutions.
The record date for entitlement of rights share, the period of subscription and the list of bankers to the issue will be notified within three working days as per the Securities and Exchange Commission (Right Issue) Rules, 2006, said the disclosure.
The company reported net asset value per share of Tk 37.29 as on December 31, 2018, according to the rights issue documents.
LankaBangla Investment Ltd is the issue manager of the rights issue.
Each share of the life insurer closed at Tk 130.20 on Sunday at DSE, soaring 9.97 per cent over the previous session.
Recently, the board of directors of the company declared 20 per cent cash dividend for the year ended on December 31, 2019.
The company's paid-up capital is Tk 153.52 million and authorised capital is Tk 250 million while total number of securities is 15.35 million.
The sponsor-directors own 41.32 per cent stake in the company, while the institutional investors own 26.53 per cent and the general public 32.15 per cent as on February 29, 2020, the DSE data shows.
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