Robi is planning to raise Tk 400 crore from the local market by issuing a Shariah-based security bond with the face value of each certificate being Tk 1 lakh.
The second largest mobile operator of the market said they were planning to use this money to expand and strengthen their countrywide network coverage.
The certificate’s maturity period will be five years starting on the issue date, reads a letter Robi recently sent to Bangladesh Telecommunication Regulatory Commission (BTRC) seeking permission for it.
The interest rate is expected to be more than 8 percent based on present market conditions, it read.
The bond will only be available at the local market for local investors, said Shahed Alam, chief corporate and regulatory officer at Robi, adding, “As a responsible business entity, Robi is looking to diversify its investment.”
He said the whole process was subject to regulatory approval and Robi would start the process for issuing it as soon as the regulator gives the approval.
Standard Chartered bank will be the lead arranger while Sena Kalyan Insurance Company will be the trustee of the Zero-Coupon Islamic Certificate, says Robi’s application.
Going through the application, the BTRC has decided to seek comment from the Bangladesh Securities and Exchange Commission (BSEC) on whether there was any legal bar to it.
Md Jahurul Haque, chairman of BTRC, said, “We will take our decision after getting the feedback from the BSEC but my personal point of view is that there is no bar to it and it might bring good to the industry.”
In the application, Robi confirmed that they were not putting up their licences as collateral for the bond.
About the security bond’s profit ratio, Alam said it was determined by the financial regulator and issuing banks and had nothing to do with the business profit made by the bond-issuing company.
Replying to another question, Alam said a company has to make a profit for three consecutive years to be eligible for initial public offering (IPO).
Unfortunately, Rob still has not been able to do so but always showed keen interest for IPO, albeit after meeting all the conditions, he said.
After incurring consecutive loses, Robi started to make profit from the end of last year. It logged Tk 214.7 crore in net profits in 2018 on the back of sales of its stake in a tower company that year.
They started 2019 with a positive note and logged Tk 11.5 crore in profit in the first quarter, driven by data revenue growth.
Robi become the second largest operator after its merger with Airtel in November 2016.
Earlier in 2015 Banglalink sold $300 million five-year notes—the first dollar-denominated bonds from Bangladesh—aiming to boost its business.