City Sugar launches Tk 130mn bond to clear debts, boost investments

Each unit will have a face value of Tk 1.3 million

City Sugar Industries, a unit of Bangladesh’s top business conglomerate City Group, has received approval to raise Tk 13 billion from the market through a bond to repay debt and invest in the sugar sector.

The Bangladesh Securities and Exchange Commission (BSEC) confirmed the approval following a meeting on Monday.

● The bond will be 100 percent collateralised, non-convertible, and fully redeemable as a zero-coupon issue.

● It will be listed on the Alternative Trading Board of the capital market.

● Discount rate: 13.5 percent

● Face value per unit: Tk 1.3 million per unit

Eligible investors include corporate entities, high-net-worth individuals, local banks, financial institutions, and insurance companies through private placement.

Syed Rashed Hussain, CEO of trustee EBL Investments, told bdnews24.com: “Land and structures in Dhaka have been mortgaged against the bond. Collateral covers the full Tk 13 billion.

“The land will be formally recorded by the trustee, and if City Sugar fails to repay, the property can be sold to compensate investors.”

Rashed added that debt repayment will reduce City Sugar’s financing costs, and part of the proceeds will be invested in sugar production, making investor risk “near zero”.

BRAC Bank PLC will act as organiser for the three-year bond.