The Bangladesh Securities and Exchange Commission (BSEC) on Tuesday (Apr 2) approved a non-convertible zero coupon bond worth Tk 2.55 billion proposed by IDLC Finance Limited.
The approval was given at a commission meeting presided over by BSEC Chairman M Khairul Hossain, held at its headquarters.
This bond is fully redeemable, unsecured, and unlisted, according to a press release.
Through this bond, IDLC Finance will be able to strengthen its liquidity position—the difference between the value of liquid assets plus incoming cash flows and outgoing cash flows resulting from commitments—to meet the current funding requirements of IDLC Finance.
The face value of each unit of this bond is Tk 1 million, and their tenure has been set at five years.
The units will be sold to banks, financial institutions, insurance companies, corporate bodies, asset management companies, mutual funds, and high net-worth individuals through private placements.
Green Delta Insurance Company Limited will act as the trustee and Standard Chartered Bank as arranger for the bond.
IDLC Finance, currently an 'A' rated company, was incorporated on 1985 as a leasing company. It got listed at the Dhaka Stock Exchange (DSE) in 1992.
The Board of Directors of IDLC Finance approved 35 percent cash dividend, at Tk 3.50 per share, at the 34th annual general meeting (AGM) for the company's shareholders.
Reflecting an improvement in portfolio quality, this succeeded in strengthening the total asset size by 14.09 percent to Tk 10.91 billion, which contributed to a five-year cumulative average growth rate (CAGR) of 16.70 percent.
The five-year CAGR of the IDLC's net profit after tax stood at 26.53 percent at the end of 2018, despite the decline in profitability experienced by its subsidiaries.