Alif Industries, a yarn producer, has decided to issue convertible bonds worth Tk 3.0 billion for land, machinery and existing factory renovation.
The bond issue is subject to the approval of the stock market regulator and the shareholders in the 28th annual general meeting scheduled for December 30, the company said in a filing with the Dhaka Stock Exchange on Wednesday.
Denomination of each convertible bond is Tk 100,000 with an interest rate/yield at 7.0 per cent base profit plus 10 per cent of total dividend (cash and bonus) declared to the ordinary shareholders. The interest amount will be disbursed semi-annually with a maturity of six years tenure.
The interest amount of the said bond is fully secured by bank guarantee. Moreover, the principal amount is also fully secure since the entire principal amount will be converted to Alif Industries shares at a discount price to the market, according to the disclosure.
The conversion rate will be at 10 per cent discount of the last 20 trading days' weighted average market price of Alif Industries.
The bond will be convertible at 25 per cent per annum from the third year and will be fully converted into shares of Alif Industries by the end of the tenure.
The issuer has the right to redeem (call) the bond earlier than maturity at 0.25 per cent premium. However, there is no put option to this issue for investors, the disclosure said.
Meanwhile, the board of the company has recommended two years of dividends at a time -2021 and 2020.
The company has recommended 10 per cent cash dividend for general shareholders for the year ended on June 30, 2021, while it announced 5.0 per cent cash dividend for general shareholders for the year ended on June 30, 2020, according to another disclosure.
The board has also decided to increase authorised capital to Tk 4.0 billion, from Tk 1.50 billion subject to the approval of the shareholders in the 28th AGM of the company.
The 29th & 28th AGM will be held on December 30 through digital platforms. The record date for AGMs is set on November 30.
The company has also reported earnings per share (EPS) of Tk 1.45, net asset value (NAV) per share of Tk 21.66 and net operating cash flow per share (NOCFPS) of Tk 0.014 for the year ended on June 30, 2021 as against Tk 1.02, Tk 20.21 and Tk 0.91 in negative respectively for the same period of the previous year.