The Securities and Exchange Commission on Thursday granted permission to Northern Power Solution Ltd to float convertible bonds on the market and also extended the deadline for MI Cement Factory Ltd and Mobil Jamuna Lubricants Bangladesh Ltd to get listed with Dhaka Stock Exchange for two weeks.
The commission in a meeting on the day extended the listing deadline of MI Cement and Mobil Jamuna, considering some recent developments, said commission spokesman Saifur Rahman.
MI Cement chairman Jahangir Alam told New Age on Thursday that, in a fresh proposal submitted to the SEC earlier on the day, they promised to pay compensations to their shareholders from the director's accounts if the share price of the company went down below its issue price to avoid any further controversies.
'We will keep Tk 5 crore in reserve in a bank account to compensate them. We also agreed to keep the directors' shares that account for 70 per cent of the total shares floated on the market under the custody of the DSE to ensure that investors will get compensated if the share price of the company dips below the issue price,' he said.
An SEC source said Mobil Jamuna, the other company facing a listing deadlock, however, stuck to its offer to issue 30 per cent bonus share to shareholders or to compensate from its premium account.
Both MI Cements and Mobil Jamuna have been facing a listing barrier as they floated their initial public offerings under the presently suspended book building method highly criticised by experts and stakeholders.
The commission in its 381st meeting on Thursday also decided to approve Northern Power Solution Ltd to float 17.50 lakh convertible bonds worth Tk 175 crore at a face value of Tk 1,000 a bond in a move to increase its paid-up capital.
SEC executive director Saifur Rahman said, 'The redemption period for the bond is four and a half years, including a six-month grace period. But the company holds unconditional right to go for redemption any time within the period.'
'When the bond will mature, half of them will be converted into shares at the IPO price. But, if the company does not go for an initial public offering within the period, it will have to pay the investors in cash,' Saifur said.
According to its financial statement for 2010, Northern Power Solution has a paid-up capital of Tk 91 crore. As per the Companies Act, a company has to go for floating an IPO within one year since its paid-up capital crosses Tk 50 crore mark.
The bond will be floated only for institutional investors at an interest rate of 18 per cent.
Among the existing shareholders of the company, Bextex Limited and Md Enamul Haque hold nearly all the shares, with Bextex owning 49.97 per cent and Md Enamul Haque 49.87 per cent stake in the company. Among the remaining shareholder, Tahura Haque holds 0.11 per cent, Md Mosleh Uddin 0.01 per cent, Mominul Islam 0.01 per cent, New England Equity Ltd 0.01 per cent, Shore Cap Holding Ltd 0.01 per cent, and Crescent Ltd 0.01 per cent stake.
Source: New Age
