BSEC approves Envoy Textile to raise Tk 870m

The stock market regulator has approved Envoy Textile’s proposal to raise Tk 870 million by issuing fully redeemable non-convertible cumulative preference shares.

The approval came during a meeting of the Bangladesh Securities and Exchange Commission (BSEC) held on Thursday at the office of the BSEC chaired by its chairman, Prof. Shibli Rubayat Ul Islam.

The textile manufacturer would raise the said fund through private placements such as institutional investors, banks, financial institutions, insurance companies and eligible investors.

The nominal value will be Tk 10 per share and the coupon rate is 7.0% to 7.5% for a term of five years.

Preferred shares are shares of a company with dividends that are paid to shareholders before common stock dividends are issued.

Most preferred stocks have a fixed dividend, unlike common stocks.

With the funds, Envoy Textiles would implement the blended yarn project and repay bank loans.

Envoy Textiles, currently an “A” class company, was publicly listed in 2012.

The company’s share price closed at Tk 48.90 each on Thursday, losing 2.42% from the previous day.

At Thursday’s meeting, the BSEC also approved an open-ended mutual fund named “UCB Taqwa Growth Fund”, launched by UCB Asset Management.

The initial size of the said fund is Tk 350 million. The fund sponsor – UCB Asset Management – will contribute Tk 50 million while the remaining Tk 300 million will be raised from general investors through the sale of fund units.

The nominal value of each share of the fund has been set at Tk 10.

UCB Asset Management acts as asset manager while Sandhani Life Insurance Company and BRAC Bank act as trustee and custodian respectively.

Mutual funds pool investors’ money and funnel it into securities such as stocks, bonds, and other assets. Open UCITS are not listed on a stock exchange but can be purchased from a management company on the basis of their net asset value.

Likewise, investors can sell fund units at any time at prices based on their current net asset value.

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