SS Steel to issue Tk 500cr bonds

SS Steel has decided to issue bonds worth Tk 500 crore in order to repay bank loans, and expand and modernise its existing facilities.

The steel producer's board of directors took the decision to issue the unsecured, convertible and redeemable coupon-bearing bonds in a meeting on April 9 and informed shareholders through a disclosure on the Dhaka Stock Exchange (DSE) yesterday.

Unsecured refers to the fact that if the company goes bankrupt and defaults on its payments to investors, the repayment of the owed principal amount, as well as interest, is not guaranteed to the investors.

Convertible refers to the fact that the bonds can be converted into a predetermined number of common stocks or equity shares whereas redeemable means that it can be paid off by the issuer prior to its maturity date.

The bonds will have a tenure of seven years and will be issued after receiving approval from the Bangladesh Securities and Exchange Commission.

SS Steel's net revenue rose 94 percent to Tk 1,486 crore in fiscal year 2022-23 while profits dropped 97 percent to Tk 1.76 crore.

This prompted the company to provide a 2 percent cash dividend. Since this is less than 10 percent, it remained as a "B" category stock on the Dhaka and Chattogram exchanges.

The steel manufacturer's performance stayed almost the same in the first half of the current fiscal year. Profits rose to Tk 1 crore in July-December of 2023-24, which was Tk 0.60 crore in the same period of FY23.

Earnings per share stood at Tk 0.03 in the first half of FY24, which was Tk 0.02 previously.

SS Steel manufactures and sells mild-steel deformed bars of various grades from billets and ingots. It also produces billets from scrap steel.

Stocks of SS Steel dropped 4 percent to Tk 13.30 at the DSE yesterday.