Envoy Textiles Limited — a leading denim manufacturer and exporter — will issue a Tk200 crore bond for buying machinery for its power plant and repaying loans.
The non-convertible, fully redeemable, and unsecured zero-coupon bond will be issued through private placement and will be listed on the alternative trading board (ATB).
The Bangladesh Securities and Exchange Commission (BSEC) approved the bond's issuance on Monday, reads a press statement by the BSEC.
According to company sources, Envoy is currently using a 10MW electricity connection by the Rural Electrification Board (REB) along with its diesel-based generators that can produce 4MW electricity.
The company will discontinue the REB connection because its quality is not up to the mark to support Envoy units, and also ditch the generators because of an increase in their operating cost.
Sources said the company will use Tk168.4 crore for buying a gas-based 19MW captive power plant machinery, and the rest for repaying loans.
The coupon rate of the bond will be 6.5% to 8%. The face value per lot is Tk20 lakh, where each lot consists of 10 bonds, reads the press release.
The minimum subscription at the individual level is Tk20 lakh, and Tk1 crore for institutional.
UCB Investment is working as the trustee, and NDB Capital Limited is the lead arranger of the bond.
Envoy Textiles was listed on the stock market in 2012 and it is the first Platinum winning textile facility in the world as certified by the Leadership in Energy and Environmental Design (LEED).