28% of the eligible Sukuk converted into Beximco shares

Investors have converted Beximco Green Sukuk worth around Tk170 crore – against an option of around Tk600 crore – into common shares of the company in the first year.

In a public disclosure on the Dhaka and Chattogram bourses on Monday, the company said that it has credited over 1.96 crore new shares to the beneficiary accounts of 325 Sukuk investors who applied for the conversion.

That means, in the first year, over 70% of Sukuk investors preferred to stick to their income investment motto as they are earning a robust double digit annual return from the Sukuk.  

However, the conversion has increased the number of Beximco shares by 2.24%, and the bourses have yet to announce any theoretical adjustment of the conglomerate's stock price, which has been stuck at the floor price of Tk115.6 apiece for nearly two months.

When company assets and earnings are set to be divided into an increased number of shares, stock prices are adjusted down in proportion to the dilution.

As the first private sector company in the country, Beximco floated Tk3,000 crore Sukuk in 2021 to finance its two solar power plants and its textile division's green expansion.

The investors, mainly banks and some other institutions, have the right to convert 20% of their Sukuk units a year into Beximco shares at 25% discounts from the 20-day average closing price of the shares prior to the record date. Unexecuted conversion rights can also be exercised in later years.

Based on the 20-day average closing price of Tk115.6 for the Beximco shares having a face value of Tk10 each, the conversion rate was Tk86.7.

On Monday, the sukuk, which has a face value of Tk00, was trading at Tk85 on the Dhaka Stock Exchange.