BSEC cancels Alif Industries' Tk300cr bond

The Bangladesh Securities and Exchange Commission (BSEC) has revoked a Tk300 crore bond issued two years ago in favour of Alif Industries, a publicly listed company.

In a stock exchange filing today, the company announced that the capital market regulator cancelled the bond on 8 October.

"The company sought a further time extension for the bond subscription, but the commission did not approve the extension," BSEC spokesperson Mohammad Rezaul Karim told TBS.

The BSEC had initially granted consent on 26 May 2022 to raise Tk300 crore through the issuance of the AIL convertible bond via a private offer.

But, Alif Industries, the bond issuer, failed to raise the required funds within the stipulated time, according to BSEC sources.

Later, the commission, under its recent past chairman, Professor Shibli Rubayat Ul Islam, who resigned after the fall of the Sheikh Hasina-led government on 5 August, extended the deadline.

However, the new commission declined to grant a further extension as Alif Industries once again failed to raise the funds.

Earlier, on 11 September, the BSEC also revoked its approval for Alif Industries to raise Tk200 crore by issuing fresh shares, only for existing sponsor directors, four months after initial consent was granted.

Alif Industries, a concern of Alif Group, had planned to use the funds to revive and repay loans for C&A Textile, a non-operational publicly listed company acquired by Alif Group in 2021.

Alif intended to pay off part of the loans for C&A Textile with the funds raised through the Tk300 crore bond and acquire another company, said an official from Alif Industries, on condition of anonymity.

"Alif Industries has invested around Tk32 crore as share money deposit to resume C&A Textile's operations and paid outstanding utility bills," he said.

"Currently, the company is operational. Its defaulted loans have been rescheduled, and Alif Industries is regularly paying instalments against the loans. However, the cancellation of the bond will create hurdles for Alif Industries in reviving C&A Textile," he added.

According to company officials, although Alif Industries received commitments of around Tk225 crore for the bond from private institutions, the fund remains unrealised due to the country's political volatility amid government change.

As per a BSEC press release issued on 23 May 2022, the commission allowed Alif Industries to issue a bond worth Tk300 crore through a private offer to banks, insurance companies, non-bank financial institutions, corporates, and high-net-worth individuals.

The bond was intended to be used for acquiring a company, repaying bank liabilities, purchasing machinery, and providing working capital for the company they planned to acquire, said the release.

At that time, Alif Industries stated its intention to acquire C&A Textile, another listed firm that had been out of production for years, with the goal of resuming operations.

By mid-2023, C&A Textile resumed operations under Alif Group's management.