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17 July, 2021 05:45:44 PM / LAST MODIFIED: 18 July, 2021 02:40:41 PM

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With first-ever Sukuk, Beximco bets big on green, publishes IM

BSS, Dhaka
With first-ever Sukuk, Beximco bets big on green, publishes IM

Beximco Ltd has published the Information Memorandum (IM) online for Bangladesh’s first ever ‘Green Sukuk’ for Taka 3,000 crore after getting approval from the Bangladesh Securities and Exchange Commission (BSEC) last Thursday.

The five-year term asset-backed Green Sukuk is convertible, redeemable and participative, the IM says.

The company will allocate 50 percent of the Sukuk issue through private placement. The 25 percent will be offered to the existing shareholders of the company, and the rest through public offer.  

The subscription of the private placement, which will be done on a first-come-first-serve basis, will close on August 22, 2021, while subscription for existing shareholders and the general public will open on August 25, 2021 and close on August 27, 2021.

With the Sukuk proceeds, the company plans to funnel Taka 2,200 crore into a 200 MW solar plant in Gaibandha and a 30 MW solar plant in Panchagarh.  

Together, they represent the largest solar project in the country.

Revenue generation of the two solar plants is guaranteed by a 20-year Power Purchase Agreement (PPA) with the government, according to the IM.

The government has recently scrapped several coal-fired power projects and emphasized on climate-friendly green power generation projects instead.  

The IM notes that Beximco seeks to cash in on the lucrative incentives offered by the government in green power projects. Its power plants will enjoy tax holiday until 2034, duty-free import and certain tariff and VAT concessions.

Balance Taka 800 crore will be used to install high speed energy efficient machinery, expand and modernize the existing green infrastructure of Beximco’s textile division, it adds.

Talking to BSS over the Beximco’s green Sukuk, Chairman of Bangladesh Securities and Exchange Commission (BSEC) Prof Shibli Rubayat Ul Islam said that the scope for making investment is less in Bangladesh for those who want to make Islamic Shariah based investment.
 
As a result, he said, the SLR of around Taka 70,000 to 80,000 crore of the Islamic banks has long been remained idle side by side a large amount of those who do not want to enjoy interest also remained idle.

Since a scope has been created for making alternate investment for the religious minded people now wants to make investment in Shariah-based Sukuk Bond.

“This Sukuk Bond will be able to bring the idle money of the religious minded people into investment, which will play a big role towards national development and arrangement of capital. Then such idle money will also contribute towards country’s industrialization and expansion of trade and commerce,” he said.

The BSEC chairman also hoped that with the launching of Shariah-based Sukuk Bond, more large scale investment would come in future from abroad.

Beximco Ltd’s Managing Director O K Chowdhury told the news agency that the Sukuk has already garnered a lot of interest. “Many financial institutions, high net worth individuals, foreign investors and non-resident Bangladeshis are approaching the company for private placement,” he added.                                                                   
 Country’s renowned economist and Agrani Bank Ltd Chairman Dr Zaid Bakht told BSS that the capital market of the country is mainly equity based while product diversification is especially needed to give protection to the investors.

He said the present government under the able leadership of the Finance Minister is giving due emphasis on it.

Dr Zaid said two Bonds of PRAN have already been issued with enough engagement of foreign investors. In addition to this, Green Sukuk Bond has now been added as many now prefer Islamic products.

“The added advantage of Green Sukuk Bond is that the religious minded people of Bangladesh like Shariah-based investment instead of the traditional bond. The special feature of Beximco Bond is that it is convertible and exchangeable. The shares can be converted in future if anyone wishes,” he added.

Dr Zaid said the country’s first private sector Islamic Sukuk Bond comes from renowned business conglomerate Beximco and the association of Agrani Bank Ltd which carries a good reputation.

He also hoped that following the footprints of Beximco, more institutions will come forward to bring bonds in the market.

MH

 

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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