Alif Industries Limited has decided to raise Tk300 crore from the capital market by issuing a convertible bond to expand its business.
The company will have to take approval from the shareholders in the general meeting and the Bangladesh Securities and Exchange Commission (BSEC) to issue the bond.
The company will use the fund to purchase land and machinery, and retrofit its existing factory.
The face value of each bond will be Tk1 lakh and the base interest rate will be 7%, while 10% of each year's total dividends (both cash and stock) will be added to the specific year's interest rate.
The interest amounts will be disbursed semiannually.
The bond will mature in six years. The interest amount of the bond will be fully secured by bank guarantee.
The entire principal amount can be converted to Alif Industries shares at a 10% discount to the previous 20 days' weighted average of the market price.
The bond will be convertible 25% per annum from the third year and will be fully converted into shares of Alif Industries by the end of the tenure.
The issuer has the right to redeem the bond earlier than maturity with a 0.25% premium over the actual amount.
The board has also decided to increase Alif Industries' authorised capital from Tk150 crore to Tk400 crore.
Alif Industries limited has declared a 10% cash dividend for its shareholders for the year ended on 30 June, 2021.
The company also has recommended a 5% cash dividend for the year ended on 30 June 2020.
Recently, Alif Group has reached an agreement with C&A Textiles to take over the firm that has not been in production for a long time.
Alif Group Managing Director Azimul Islam said earlier, "Previously we have bought CMC Kamal Textile and Sajib knitwear and Garments Limited which are
currently doing rather well under Alif Group. Likewise, we want to take C&A Textile forward."
Earlier, the group announced the acquisition of Central Pharma and BD Welding, which are listed on the stock exchange. But later the group backed away from the acquisition decision.
Alif Group started its business in the country in 1967 through oil trading.
Sajib Knitwear and Garments Limited was performing poorly and left in the over-the-counter market of the Dhaka Stock Exchange.
Acquiring a stake in the company, Alif Group relisted it in 2017.