Envoy Textiles to raise Tk 150cr thru' bonds

Envoy Textiles will raise Tk 150 crore by issuing zero coupon bonds to increase its production capacity.

The listed company announced the issuance of the bonds through private placement in a posting on the Dhaka Stock Exchange website yesterday. The board of directors has decided to issue the 5-year series zero coupon bonds with a face value of Tk 150 crore and at a discounted value of Tk 122.42 crore.

The issuance of the bonds is subject to approval of Bangladesh Securities and Exchange Commission.

“Envoy Textiles wants to raise the fund for importing machinery to strengthen its production capacity,” said Abdus Salam Murshedy, managing director of Envoy Group.

He said the company has decided to raise the fund by issuing bonds instead of offloading shares because of cost-effectiveness.  The zero coupon bonds will be redeemable and non-convertible in nature with a discount rate of 7.75 percent to be issued in series with maturity periods starting from six months to five years, according to the company.

Envoy Textiles' prices closed at Tk 37.80 on the Dhaka bourse yesterday, gaining Tk 0.30 compared to the previous session.  The paid-up capital of the company is Tk 156.61 crore. The company declared 12 percent cash and 3 percent stock dividends for 2016. It made a profit of Tk 22 crore in the nine months from July 2016 to March 2017.

Envoy Textiles is a manufacturer of fashion denim, with annual production capacity of 50 million yards of fabric, according to the company's website.