Beximco to issue Tk3,000cr Sukuk to expand solar, textile business | The Business Standard
Skip to main content
  • Home
  • Economy
    • Aviation
    • Banking
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Food
    • Habitat
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wheels
  • Epaper
    • GOVT. Ad
  • More
    • Subscribe
    • Videos
    • TBS Graduates
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Long Read
    • Interviews
    • Offbeat
    • Tech
    • Magazine
  • বাংলা
The Business Standard

Wednesday
November 29, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Banking
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Food
    • Habitat
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wheels
  • Epaper
    • GOVT. Ad
  • More
    • Subscribe
    • Videos
    • TBS Graduates
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Long Read
    • Interviews
    • Offbeat
    • Tech
    • Magazine
  • বাংলা
WEDNESDAY, NOVEMBER 29, 2023
Beximco to issue Tk3,000cr Sukuk to expand solar, textile business

Corporates

Mahfuz Ullah Babu
02 March, 2021, 10:55 pm
Last modified: 02 March, 2021, 11:13 pm

Related News

  • Why we owe renewable investments to our future generations
  • Textile Xperts holds career summit at City University
  • Indonesia president inaugurates $108 million floating solar plant
  • Beximco suffers Tk70cr loss in September quarter
  • Garment and Textile Machinery Expo starts Thursday

Beximco to issue Tk3,000cr Sukuk to expand solar, textile business

The Sukuk units will have a face value of Tk100 each

Mahfuz Ullah Babu
02 March, 2021, 10:55 pm
Last modified: 02 March, 2021, 11:13 pm
Beximco to issue Tk3,000cr Sukuk to expand solar, textile business

Debt securities vs Sukuk

  • Debt securities like bonds and debentures are debt obligations
  • Sukuk involves asset ownership
  • Bond investors depend on credit rating of the issuer
  • Sukuk are priced according to value of the underlying tangible asset
  • Traditional interest from debt securities are not halal for Muslims
  • Sukuk are Shariah-compliant financial instruments

Beximco Ltd has announced to issue the first-ever private sector asset-backed Islamic securities, also known as Sukuk, in Bangladesh and the company said the proceeds will be invested in its solar and textile businesses.

The planned Tk3,000 crore Sukuk will be the largest ever issuance of securities in the private sector of Bangladesh.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

The government recently issued the country's first-ever Tk8,000 crore Sukuk for a safe water supply project.

Beximco on Tuesday said the proceeds from the Sukuk would be invested mainly in implementing solar projects of Teesta Solar Ltd and Korotoa Solar Ltd – both are subsidiaries of Beximco Ltd's subsidiary Beximco Power Company Ltd.

With the remaining money, the company will also finance and refinance the machinery and equipment required for the expansion of Beximco's textile division.

Unlike bonds where the company directly issues debt securities, Beximco will have to form a Special Purpose Vehicle (SPV) with regulatory approval from the Bangladesh Securities and Exchange Commission (BSEC).

The SPV will issue the Sukuk as it will look after the asset-investment relationship.

Beximco Group Vice Chairman Salman F Rahman told The Business Standard, "We were planning for traditional bonds, but Shariah-compliant banks said they need Sukuk to park their huge liquid assets."

"In primary marketing of the issuance plan, we observed great interest among local non-Shariah investors and Islamic banks abroad," he added. 

Fifty percent of the Sukuk would be privately placed while 25% would be reserved for Beximco Ltd shareholders and the remaining 25% would be floated through public offers as the Sukuk would be listed on the local bourses upon getting the regulatory approval.

The Sukuk units will have a face value of Tk100 each, while an investor can buy a single lot with Tk5,000 only in public offer. Sukuk holders will receive their periodical profits twice a year.

Investment banking sources said City Bank Capital Resources Ltd is working as the advisor, arranger, and issue manager for the Sukuk.

The base rate of the Sukuk was set at 9%, which means investors would be getting 9% secured annual return.

The margin was set at 10% of the difference between the base rate and the annual dividend that Beximco will pay in a specific year.

The margin would be added to the base rate if Beximco's dividend for the specific year surpasses the base rate. If the dividend is lower than the base rate, there would be no negative margin.

Investors can gradually convert their Sukuk to Beximco shares over its five-year tenure, but they can convert a maximum of 20% of the total in a year.

Unexercised options to convert in a year can be exercised in the following year as well, along with the current year's option.  

If someone does not convert, they will get the principal back after the fifth year.

The conversion would lead to an increase in Beximco's paid-up capital and that might dilute the listed company's asset and earnings per share.

Salman said, "We have done our math. We are confident that the revenue and profit impacts of the Sukuk-financed projects will surpass the dilution effects."

The textile division would enjoy increased revenue within six months, while the ongoing solar projects will see high revenue within a year, he added.

Top News

Beximco / Sukuk / Solar / textile

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Despite some positives like, changes in wordings the major things workers demand have not been reflected in the amendments. Photo: TBS
    Washington embassy tells commerce ministry to prioritise US labour policy, warns it could hurt apparel sector
  • Taka appreciated officially, market reacts quite opposite
    Taka appreciated officially, market reacts quite opposite
  • Photo: Collected
    Yet to file tax returns? Two-month extension on the cards

MOST VIEWED

  • Tax return time extension likely
    Tax return time extension likely
  •  File photo of a North Korean flag. REUTERS
    North Korea shuts down its embassy in Bangladesh
  • 12 expressways outlined for wider connectivity by 2041
    12 expressways outlined for wider connectivity by 2041
  • Photo: TBS
    Ctg city enters ‘Smart School Bus’ era
  • The architectural design of Anukrom is a triumph of purpose and ingenuity – a rectangular structure that stretches east to west, crafting out two courtyards. Photo: Shakil Hai
    Anukrom: A mother’s dream, a son’s guilt and an award-winning home
  • Bajaj Pulsar 250cc. Photo: Bajaj's official website
    Bajaj Pulsar N250: First higher cc motorcycle launched at Tk3.4 lakh

Related News

  • Why we owe renewable investments to our future generations
  • Textile Xperts holds career summit at City University
  • Indonesia president inaugurates $108 million floating solar plant
  • Beximco suffers Tk70cr loss in September quarter
  • Garment and Textile Machinery Expo starts Thursday

Features

Disadvantaged groups are more exposed to climate effects and less able to recover from damages. A Bangladeshi family travels to a safer location as water enters new areas after the cyclone Aila hit Bangladesh in 2009. Photo: Abir Abdullah

Climate and inequality entwinement imperils us all

5h | Panorama
A lesson on living the moment: 20 years of Kal Ho Naa Ho

A lesson on living the moment: 20 years of Kal Ho Naa Ho

21h | Features
In Barishal’s case, the low-cost of travel via waterways encourages people to migrate to Dhaka and other cities, like Chattogram. Photo: Syed Zakir Hossain

Why nearly a-fifth of people from Barishal moved to Dhaka

22h | Panorama
Photo: Salahuddin Ahmed/TBS

Political unrest hampers admission prep for HSC 2023 intake

23h | Education

More Videos from TBS

The reason for the disaster is the glossy image of the social media

The reason for the disaster is the glossy image of the social media

2h | Tech Talk
China investigates major shadow bank for 'crimes'

China investigates major shadow bank for 'crimes'

2h | TBS Economy
Pakistan may lose its opportunity to host the Champions Trophy in 2025

Pakistan may lose its opportunity to host the Champions Trophy in 2025

16h | TBS SPORTS
Climate AI will predict crop yields

Climate AI will predict crop yields

15h | TBS Science
EMAIL US
[email protected]
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]