City Group to raise Tk 1,500cr thru bond for City Sugar Industries

City Group, one of the leading consumer goods importers and processors, plans to raise Tk 1,500 crore for City Sugar Industries by issuing a fully mortgage-backed zero coupon bond.

BRAC Bank has been entrusted to facilitate fund mobilisation through the issuance of the zero coupon bond, which does not pay interest but instead trades at a deep discount.

To this end, Tareq Refat Ullah Khan, deputy managing director and head of corporate and institutional banking at the bank, and Mohammad Tanvir Hydar Pavel, director of finance and commercial at City Sugar Industries, signed an agreement at a function at the bank's head office in Dhaka recently, according to a press release.

Selim RF Hussain, managing director and CEO of BRAC Bank, and Md Hasan, managing director of City Group, attended the signing ceremony.

The funds to be raised through this bond will support City Sugar Industries Limited in expanding its trade operations, enhancing cash flow management, and diversifying its financing avenues, thereby reducing dependence on traditional credit facilities, the statement said.

The bond issuance is subject to approval from the Bangladesh Securities and Exchange Commission.

This three-year bond, fully secured and structured to offer an attractive return, is designed to cater to a diverse investor base, including individuals and corporate entities across Bangladesh.

Once approved by the regulatory authority, this transaction will play a vital role in developing Bangladesh's corporate bond market, fostering alternative investment opportunities, and enriching financial products, the statement said.

Sheikh Mohammad Ashfaque, deputy managing director and head of branch distribution network of the bank, Md Mahiul Islam, deputy managing director and head of retail banking, and Tanveer Kamal, head of structured finance unit, were present.

Reza Uddin Ahmad, director of finance and investments of City Group, and Khizir Hayat Khan, director of import, along with other senior officials from both organisations, were also present.