SME co Mostafa Metal to issue zero-coupon bonds

SME company Mostafa Metal Industries is set to issue non-convertible, zero-coupon bonds worth Tk 180 million for business expansion.

The issuance of the bonds was approved at the latest annual general meeting of the company, according to a stock exchange filing on Wednesday.

The bonds will be sold at an 11 per cent discount, and the full face value will be redeemable at maturity seven years after the date of issuance.

The board of directors of the company decided to issue bonds for raising money as working capital, subject to the approval of the Bangladesh Securities and Exchange Commission (BSEC).

The manufacturer of all kinds of Polyvinyl Chloride (PVC) and wood plastic composite (WPC) doors for the local market will issue the bonds through private placement.

The price for each unit of the bonds is Tk 1 million and the total lot is 180, according to the disclosure posted on the Chittagong Stock Exchange.

Mostafa Metal Industries raised Tk 110 million through qualified investors offer in September 2021 for the purpose of repaying bank loans and expanding working capital.

Company secretary Md Nazmul Islam said the company would increase production capacity with the money as it sought to meet growing demand.

However, the company's sales revenue rose only 1 per cent year-on-year to Tk 421.40 million for FY22 while profit dropped 8 per cent to Tk 50.30 million.

The company disbursed 7 per cent cash dividend amounting to Tk 23.54 million to general shareholders out of the distributable profit for FY22.

It is yet to disclose any financial data for FY23. The stock closed at Tk 15.80 on Thursday, losing 1.25 per cent over the previous day.

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