Home ›› 15 Nov 2021 ›› Stock
Mir Akhter Hossain Ltd, one of the largest and oldest constructions firms in Bangladesh, will raise Tk 250 crore by issuing zero-coupon bonds to purchase new equipment and refinance debts.
The board decided to issue the bonds at face value subject to the approval of the Bangladesh Securities and Exchange Commission (BSEC), said the company in a filing with the Dhaka Stock Exchange (DSE) on Sunday.
“We will issue the bonds to increase our cash flow as an alternative financing,” said Mir Akhter Hossain’s Managing Director Mir Nasir Hossain told The Business Post.
The company mostly took loans from banks as working capital and some of the loans are also term loans used for three or four years, according to him.
“We’re opting for bonds because of their fixed-rate and it is relatively risk-free. But the bank interest rate is caped and floating. For the long-term loan, the floating rate is risky for a company,” said Hossain.
“The mature period of the bond is yet to be fixed. However, it may be four years like a bank’s term loan period,” he added.
A zero-coupon bond is a bond in which the face value is repaid at the time of maturity. It does not make periodic interest payments or has so-called coupons, hence the term zero-coupon bond. When the bond reaches maturity, its investor receives its par value.
Mir Akhter got the IPO approval from the securities regulator BSEC to raise Tk 125 crore.
At present, as many as 37 public and private sector projects are under Mir Akhter’s arm.
The projects included Osmani International Airport expansion, Bakkhali River Bridge construction, JICA Access Road Package-3.3, and Jamuna River dredging. Analyzer expected to record healthy revenues in days to come as it has been implanting a handful of projects.
On Sunday, its share price declined 6.69 per cent to Tk 66.90 on the Dhaka Stock Exchange.
