General investors have subscribed only 56% of the total public offer of Tk750 crore of the Beximco Green-Sukuk Al Istisna – the first-ever asset-backed securities by a private sector entity in Bangladesh.
Beximco Limited had earlier secured approval from the Bangladesh Securities and Exchange Commission (BSEC) to launch its Tk3,000 crore Sukuk bond for a five-year tenure.
Out of the total amount, the listed company will privately place Sukuk units worth Tk2,250 crore, of which Tk750 crore will be offered to the company's existing shareholders, and Tk1,500 crore to other investors.
Besides, Sukuk units worth Tk750 crore would be floated by public offers.
Its public subscriptions opened from 17 August to 23 August. But due to the under-subscription of the public offer, BSEC extended the offer period till 30 September.
The Sukuk units having a face value of Tk100 each will have to be subscribed in a lot of 50 units or multiples that would amount to at least Tk5,000.
Sources at BSEC said general investors have subscribed for Tk422 crore of the total offer amount at the end of the extended period.
Now the underwriter will subscribe 20% of the total public offer, the sources added.
BSEC officials said the Sukuk would be a green one as the company would spend the money on eco-friendly infrastructures.
Beximco Limited would expand its textile unit alongside implementing two solar power projects under its power division with the Sukuk money.
Investment Corporation of Bangladesh is the trustee of the Sukuk, while City Bank Capital Resources Ltd and Agrani Equity and Investment Ltd are jointly working as issue managers.
The base rate of the Sukuk was set at 9%, which means investors would be getting a 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.
In a circular, the central bank has recently allowed banks to invest in Sukuk bonds, which are being issued for eco-friendly projects, from their capital market special funds.