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Alif Industries Limited has decided to raise Tk 300 crore from the capital market by issuing convertible bonds, subject to approval of securities regulator and general shareholders.
The listed textile company will spend the proceeds to purchase land, machinery and to retrofit factory, it said in a filing with the Dhaka Stock Exchange (DSE) on Wednesday.
The face value of each unit of the bonds will be Tk 1 lakh and it will mature in six years.
The interest rate for the bond was set at 7 per cent, in addition to 10 per cent of total dividend (cash and bonus) declared for the ordinary shareholders.
The interest amount, which is fully secured by bank guarantee, will be disbursed after every six months.
The principle amount is also fully secured as the entire principle amount will be converted to Alif industries shares at a discount price to the market, added the filing.
The bond will be convertible 25 per cent per annum from the third year and will be fully converted into shares of AIL by the end of the tenure.
The conversion rate will be at 10 per cent discount of last 20 trading days’ weighted average market price of AIL.
Meanwhile, Alif Industries declared 10 per cent and 5 per cent cash dividends for general shareholders for FY21 and FY20 respectively.
The company also decided to increase its authorised capital from Tk 150 crore to Tk 400 crore and amend the memorandum and article of association.
It will hold an annual general meeting on December 30 for approval of general shareholders.
AIL is a subsidiary of Alif Group. It has recently acquired all stakes of C&A Textiles, which has been out of operation for more than four years.
Bangladesh Securities and Exchange Commission (BSEC) recently accepted the acquisition proposal “in the greater interest of investors” and issued seven instructions for the group to comply with.
