Beximco Sukuk IPO subscription completed

The subscription for the Beximco-floated green Sukuk bond touched the amount of Tk 3,000 core, the total size of the bond.

“Beximco Sukuk’s subscription was completed on Wednesday much before January 5—the deadline,” its issue manager City Bank Capital Resources Limited CEO Ershad Hossain told The Business Post.

Bangladesh Securities and Exchange Commission (BSEC) approved the bond proposed by Beximco Limited on June 23 to finance construction goals and equipment procurement.

Sukuk is an Islamic financial certificate similar to a treasury bond, which complies with Shariah laws.

The bond had received subscriptions of around Tk 422 crore or 56 percent of its public portion of Tk 750 crore.

Despite the extension of the subscription period twice, the bond remained undersubscribed.

“The under subscription portion was subscribed on Wednesday,” said Hossain.

The subscription process started on August 16 with much enthusiasm as it was the maiden green Sukuk bond to be introduced in the capital market.

The Sukuk units, with a face value of Tk 100 each, will be offered in a lot of 50 units or multiples that would amount to at least Tk 5,000. However, there is no limit to the subscription process.

Earlier on July 25, existing shareholders of Beximco Limited started to turn to the Green Sukuk bonds. The process will continue till August 26.

The tenure of the bond is five years, of which investors will gain a minimum of 9 per cent as secured annual returns.

According to the BSEC, half of the Tk 3,000-crore fund would be raised through private placement while Sukuk worth Tk 750 crore through the existing Beximco shareholders.

The remaining Tk 750 crore will be raised through an initial public offering in compliance with the commission’s public offer rules.

According to the company, the fund raised from the Sukuk will be used for construction of two solar projects – Teesta Solar and Korotoa Solar – two subsidiaries of Beximco Power Company, and financing and refinancing machinery and equipment required for expansion of Beximco’s textile division.