The stock market regulator accepted Sinobangla Industries' proposal to raise nearly Tk 202 million by issuing rights shares for business expansion and loan repayments.
As per the approval given at a meeting of the Bangladesh Securities and Exchange Commission (BSEC) on Tuesday, the plastic packaging product manufacturer will issue one rights share against existing two shares at an issue price of Tk 20 each, with a premium of Tk 10 per share.
The company will issue over 10.09 million rights shares and utilise the proceeds for purchasing capital machinery and loan repayment.
UCB Investment Ltd is acting as the issue manager.
Rights issues are new shares offered by a company to its existing shareholders in proportion to the shares they already own, usually at a discount to the market price within a given time.
Currently, the company's paid-up capital is Tk 201.97 million.
It has reported earnings per share of Tk 1.73 in FY23, down from Tk 1.79 the year before. Its net asset value (NAV) per share was Tk 28.34, up from Tk 27.87 in June 2022.
The company declared 10 per cent cash dividend for the year ended in June.
Sinobangla's stock price rose 3.24 per cent to Tk 70.10 on Tuesday on the Dhaka bourse.
Founded in 1996 as a China-Bangladesh joint venture, the company produces and exports a complete range of polypropylene woven sacks and value-added flexible intermediate bulk containers.
Southeast Bank Perpetual Bond
At the Tuesday's meeting, the securities regulator also gave consent to a proposal of Southeast Bank to raise Tk 5 billion by issuing perpetual bonds -- Southeast Bank 1st Perpetual Bond.
The purpose of the bond is to strengthen the additional Tier-1 capital base of the bank.
A perpetual bond is a fixed-income security with no maturity date and is often considered as a type of equity rather than debt. This type of bonds is not redeemable but it provides a never-ending stream of interest payments.
Of the Tk 5 billion, Tk 4.50 billion will be raised through private placement and the remaining Tk 500 million through public offering in compliance with the BSEC public offering rules.
The coupon rate of the bond will be 6-10 per cent with a face value of Tk 5,000 per unit.
IDLC Investment is acting as the trustee of the bonds, while IDLC Finance, City Bank Capital Resources, and Southeast Bank Capital Services are working as arrangers.
Southeast Bank Capital Services and UCB Investment are jointly working as issue manager while Rupali Investment is the underwriter.
The bond will have to be listed on the exchange's alternative trading board (ATB) to meet a regulatory requirement.
According to a BSEC directive issued in May 2021, if an issuer intends to raise debt capital by issuing perpetual bonds, it shall make a public offer of at least 10 per cent of its intended offer.
The directive also said perpetual bonds must be listed on the bourses through the direct listing method.
Earlier, perpetual bonds had been issued only through private placements; they were not tradable in the stock market.
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