Home ›› 07 Sep 2021 ›› Front
Beximco Sukuk risks having its public offer cancelled as the securities regulator on Monday warned of revoking its subscription if at least 30 per cent issue is not subscribed by the new extended period of September 30.
The warning comes as the much-talked-about Green Sukuk, first of its kind in the private sector, managed to get only 7.43 per cent issue subscribed by the yesterday’s deadline.
In a letter to Beximco on Monday, the Bangladesh Securities and Exchange Commission (BSEC) attached the condition and extended the deadline for the second time till September 30. As per the Securities and Exchange Ordinance, 1969, the public offering shares will be cancelled if the minimum subscription is not fulfilled within the stipulated time.
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 commission in its letter said, “If the public subscription of Beximco Green Sukuk is not subscribed at the required level as per the rule 12(2) of Bangladesh Securities and Exchange Commission (Debt Securties) Rules, 2021, within 30th September, the said public subscription will be canceled.”
The stock market regulator imposed the condition under 2CC of the Securities and Exchange Ordinance, 1969.
As per debt securities rules, at least 30 per cent of the public issue or offer of any securities under these rules shall be subscribed by the general public.
Provided that in case of under-subscription above 50 per cent of the public issue after subscription of 20 per cent by the underwriter, if necessary, the issue will be canceled, adds the rules.
Beximco set a target to raise Tk 750 crore from the public through the initial public offering (IPO) shares.
However, only 7.43 per cent of the target was achieved as of yesterday as it received bids worth only Tk 55.71 crore from some 72 institutional investors during the stipulated period.
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 BSEC approved the issuance of a Tk 3,000 crore green Sukuk bond in favour of 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 tenure of the bond is five years, of which investors will gain a minimum of 9 per cent as secured annual returns.
As per the commission’s statement, 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.
As per the company sources, 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.
