BSEC helps Brummer Frontier Fund’s timely exit from Runner Auto

The Bangladesh Securities and Exchange Commission (BSEC) has reduced the lock-in period for the Brummer and Partners' second Bangladesh-focused private equity fund's stake in Runner Automobiles Ltd.

Brummer Frontier PE II (Mauritius) Limited's one-fourth stake in the listed automobile company was subject to a three-year lock-in period since its debut.

As the investments by the private equity fund are made for tenure not more than the life of the fund itself and the fund has already passed its 10 years of age, Brummer and Partners Bangladesh which runs the fund locally applied to the securities regulator for shortening the lock-in period earlier in June.

The fund made Tk105 crore equity investments in Runner Automobiles in September 2013. The stake now is valued at around Tk150 crore, according to Runner's market capitalisation in the Dhaka Stock Exchange on Sunday.

Runner was the second-largest two-wheeler brand in the local market when Brummer injected equity to help the first two-wheeler manufacturer in the country grow.

Over the following years, Runner faced increased competition in the two-wheeler market and its market share in percentage terms dropped.

However, though the introduction of a wide range of international two-wheeler brands like Vespa, Aprilia, KTM and UM alongside its affordable motorcycles, moped and scooter Runner keeps pace in its two-wheeler business.

On top of that, the company, through its subsidiary Runner Motors, is distributing Eicher commercial vehicles which have been positioned well in the market.

Also, Runner is distributing LPG-run Bajaj three-wheelers in the country, while it is investing in a factory to manufacture Bajaj three-wheelers at its Bhaluka, Mymensingh factory complex.

Runner Automobiles made its stock market debut in May 2019 following its Tk100 crore capital raised through an initial public offering.

International Finance Corporation, the UK government's investment fund CDC, Norwegian government's fund Norfund, Dutch government's fund FMO and some other international institutions are the investors of the Brummer Frontier PE II which were registered in Mauritius.

Brummer and Partners is a top Swedish fund manager having international exposure.