Robi pulls out of plan to raise Tk400cr from bonds

Robi Axiata Ltd, the second-largest telecom operator of the country, has withdrawn its application to issue Shariah-based security bonds from which it had intended to raise Tk400 crore. 

The Bangladesh Securities and Exchange Commission (BSEC) has already filed a letter regarding the withdrawal. 

According to sources, although the securities regulator approved the application quickly, it took Robi a long time to get approval from the Bangladesh Telecommunication Regulatory Commission (BTRC). 

The BTRC also imposed a condition that it could order Robi to withdraw the funds from the market at any moment, the sources added.

Shahed Alam, chief corporate and regulatory officer of Robi, told The Business Standard, "We initiated Bangladesh's first Shariah-based bond. While the BSEC was prompt to approve it, the BTRC took considerable time. In addition, the condition imposed by the BTRC has been rejected by potential investors." 

He added that they were "very sad" to note that the telecom regulator had failed to envisage its potential in developing the local bond market. 

"We see it as a missed opportunity for the country to fortify its financial sector," Shahed further said. 

BTRC Chairman Md Jahurul Haque said, "If any telecom operator wants to do anything, they need our approval. But by considering the overall situation and the interest of consumers, we often approve their plans." 

"We give approvals in a legal manner.  It is not our job to see who is benefitted or inconvenienced by it," he added.

In April last year, Robi Axiata took the initiative to raise funds from local investors for network expansion and repayment of term loans. 

Robi had planned to name these Shariah-based securities as the "Zero Coupon Islamic Certificate" bonds. 

Each bond was supposed to be valued at Tk1 lakh in a diminishing Musharaka system – a joint enterprise or partnership structure where partners share in the profits and losses of an enterprise – through the Standard Chartered Bank. 

The maturity period was supposed to be five years and the profit rate was set at 8 percent. 

Sena Kalyan Insurance Company Limited would have been the trustee for the bonds.

Robi wanted to spend Tk230.23 crore on purchasing equipment for network expansion, including VAT payment, and Tk93 crore on repaying term loans from the proceeds of the bond.

Meanwhile, Robi has already applied to raise Tk523 crore from the capital market through issuing new shares in an initial public offering (IPO).

Robi will issue 523.8 million new shares at a face value of Tk10 each. 

Of the new scrips, 387.7 million shares will be offered to the public, which will represent 7.4 percent of the company's post-IPO number of shares.

On the other hand, its employees and directors will be offered to buy 136.1 million shares under an employee stock purchase plan (ESPP), which will represent 2.6 percent of the post-IPO number of shares.

The IPO proceeds will be utilised to fund Robi's capital expenditures and enhance its profile as a leading telecom operator.

The company commenced operations in 1997 as Telekom Malaysia International (Bangladesh), under the brand name Aktel. In 2010, it was rebranded as Robi and the company changed its name to Robi Axiata Ltd.

After the merger with Airtel Bangladesh in 2016, the company emerged as the second-largest telecom operator and retained the same name. 

This merger helped the company to see profits last year, after several years of losses. 

Malaysian telecom giant Axiata Group Berhad holds 68.69 percent of Robi Axiata's controlling shares. Other shareholders in the entity are Delhi-based Bharti Airtel and Tokyo-based NTT DOCOMO.

At the moment, Robi's main competitor Grameenphone Ltd is the only telecom operator listed in the Bangladeshi stock market.