Sea Pearl to convert Tk120cr debt into shares for ICB

Infographic: TBS

Sea Pearl Beach Resort and Spa is set to convert Tk120 crore of its debt to the Investment Corporation of Bangladesh (ICB) into ordinary shares.

In 2017, Sea Pearl raised Tk325 crore through a convertible bond that was fully subscribed by ICB. 

In a stock exchange filing on Thursday, Sea Pearl stated that ICB wrote to Sea Pearl last month requesting the conversion of Tk120 crore of the bond into ordinary shares.

In response to this request, the board of Sea Pearl approved the conversion of Tk120 crore into the company's paid-up capital in accordance with the terms and conditions and compliance outlined in ICB's letter subject to approval of the Bangladesh Securities and Exchange Commission (BSEC), and shareholders in annual general meeting (AGM). 

According to Sea Pearl, this conversion will lead to an easing of the company's debt burden, resulting in the annual savings of Tk12 crore in financial expenses. 

Also, this strategic move will strengthen the financial position significantly, enhancing its overall performance in the long run, the disclosure reads.

According to sources, Sea Pearl owes ICB more than Tk400 crore against its Tk325 crore bond. 

Following a two-year moratorium, Sea Pearl was set to begin semi-annual repayments from April 2020.

But citing the pandemic that drastically reduced its hotel business capacity utilisation then, the company failed to pay any sum to ICB and hence, kept applying for waivers.

To refrain from being a defaulter, the listed company even went to court where it presented the pandemic as the evil behind the decline in its business and non-payments to ICB.

"After the court order, the company had paid Tk25 crore to ICB, and in total, it paid Tk63 crore so far," said Sea Pearl's Company Secretary Md Azaharul Mamun.

When asked about the price of the shares, he said, "It is yet to be finalised, but will be determined as per securities rules."