City Sugar set to issue Tk1,500cr bond for business expansion
The company taps BRAC Bank as bond arranger
City Sugar Industries Limited, a flagship company of City Group, has announced plans to raise Tk1,500 crore through the issuance of a 100% mortgage-backed zero-coupon bond.
The bond issuance, pending approval from the Bangladesh Securities and Exchange Commission (BSEC), aims to provide a secure and innovative investment opportunity while supporting the company's growth initiatives, according to a press release.
Established in 2006, City Sugar Industries has emerged as one of the leading sugar refining companies in Bangladesh. Based in the Narayanganj district, the company operates as a heavy industry, producing its flagship brand, Teer Sugar.
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Equipped with state-of-the-art facilities, City Sugar Industries has a daily refining capacity of 5,000 tonnes, resulting in an impressive annual output of 1.5 million tonnes of refined sugar.
According to the press release, the three-year bond is fully secured and structured to offer attractive returns, targeting a diverse investor base that includes both individual and corporate investors across Bangladesh.
This medium-term financial instrument is designed to align with the evolving risk appetites of institutional and retail investors, while also contributing to the deepening of the country's capital market, said the press release.
The funds raised through the bond will be utilised to expand trade operations, enhance cash flow management, and diversify financing avenues, reducing the company's reliance on traditional bank credit facilities.
City Sugar Industries emphasised that the bond presents a compelling investment opportunity for Bangladesh's growing investor base, which is increasingly seeking secure and innovative financial instruments.
To facilitate the bond issuance, City Sugar Industries signed an agreement with BRAC Bank on 17 February, appointing the bank as the arranger for the bond.
The agreement was signed by Tareq Refat Ullah Khan, deputy managing director and head of Corporate and Institutional Banking at BRAC Bank, and Mohammad Tanvir Hydar Pavel, director of City Sugar.
The signing ceremony was attended by Selim RF Hussain, Managing Director of BRAC Bank, and Md Hasan, Managing Director of City Group.
Once approved by the BSEC, this landmark transaction is expected to reinforce BRAC Bank's commitment to market innovation and play a pivotal role in developing Bangladesh's corporate bond market.
The initiative is set to foster alternative investment opportunities, enrich financial products, and contribute to the country's economic growth, industrialisation, and employment generation, read the press release.
