The securities regulator, in a meeting held on Thursday, has allowed Navana Pharmaceuticals Limited to issue a bond worth Tk150 crore with a maturity period of five years.
The company wants to raise the fund for its loan repayment.
In a press release, the Bangladesh Securities and Exchange Commission (BSEC) stated the nature of the bond is unsecured and 60% convertible into the company’s equity. The range of the coupon rate is 8-10%.
The bond will be privately placed among investors and they would receive interests twice a year.
The BSEC also stated that Navana Pharma’s bond will be listed on the Alternative Trading Board so that investors can trade it in the secondary market.
Prime Bank Investment will act as trustee and City Bank Capital Resources as arranger of the bond.
Earlier, Company Secretary Joynul Abedin said, “The bond will strengthen our financial position and provide us with the necessary capital to pursue our growth strategies.”
“It would help save some interest expenses as the cost of bond capital would be lower than that of bank loans.”
The company would also enjoy a better cash flow as bond interest would be paid once in every six months while bank loans are paid back in monthly installments, he added.
As of 31 March, Navana Pharmaceuticals has a bank liability of Tk330 crore.
Earlier, it had paid back Tk21.18 crore bank loans out of the capital it collected from the investors through an initial public offering last year.
Meanwhile, the drug maker has recommended a 13% cash dividend to its shareholders for the fiscal 2022-23.
At the end of FY23, its earnings per share stood at Tk3.59 and net asset value per share at Tk40.71.
Navana Pharmaceuticals shares, having a face value of Tk10 apiece, fell by 2.31% to Tk86.70 at the Dhaka bourse on Thursday, compared to the previous trading session.