Renata announces EGM date to raise Tk325cr through preference shares

Renata Limited, a leading pharmaceutical company, has announced the date for its Extraordinary General Meeting (EGM) and the corresponding record date to seek shareholder approval for raising Tk325 crore through the issuance of fully convertible preference shares. 

The funds will be used to partially repay the company's outstanding loans and borrowings.

The EGM will be held on 20 September via a digital platform, and the record date has been fixed for 20 August this year.

Fully Convertible Preference Shares (FCPS) are a type of preference share that can be fully converted into common (equity) shares of a company after a specified period or upon meeting certain conditions.

The Bangladesh Securities and Exchange Commission (BSEC) stated that the company must once again obtain approval from its general shareholders for the new plan. 

Previously, the company had secured approval for issuing Non-Cumulative, Non-Participative, Redeemable or Fully Convertible Preference Shares. Since it now intends to issue only Fully Convertible Preference Shares, fresh shareholder approval is required.

In a stock exchange filing on 27 July, Renata said the BSEC has approved its preference share issuance, with a three-month validity to raise the funds as per the consent letter.

Eight months ago, in November, the drug maker announced plans to raise Tk325 crore through redeemable, cumulative, non-convertible, and non-participative preference shares.

Later, on 18 January, Renata's board revised the nature of the preference shares to non-cumulative, non-participative, and fully convertible.

According to sources, the preference shares will have a six-year tenure, with conversion to Renata's equity beginning in the third year at a rate of 25% annually over the following four years.

According to its third-quarter financial statement, Renata had outstanding loans of around Tk1,900 crore as of March 2025 — Tk1,224 crore in short-term borrowings and Tk675 crore in long-term loans from several banks.

The company's short-term loan balance was Tk1,083 crore during the same period of the previous year (March 2024).

The Renata disclosure states that the regulator's approval for the issuance of preference shares is subject to shareholders' approval in the upcoming EGM.

"In light of this development, the board will convene an immediate meeting to finalise and approve the record date for eligibility of shareholders to attend the EGM and apply for the aforementioned preference shares," the disclosure read.