Bangladesh: City sugar industries to raise Tk1,500 crore through mortgage-backed zero-coupon bond
City Sugar Industries Ltd., a leading Bangladeshi sugar refiner, plans to raise Tk1,500 crore through a 100% mortgage-backed zero-coupon bond, pending BSEC approval. The three-year bond aims to expand operations, improve cash flow, and reduce reliance on bank loans. BRAC Bank will arrange the issuance, marking a significant step in Bangladesh’s corporate bond market growth.
Dhaka, Bangladesh: City Sugar Industries Limited, a leading company under the City Group, has announced its intention to raise Tk1,500 crore by issuing a 100% mortgage-backed zero-coupon bond. According to a recent statement, the move, which is awaiting approval from the Bangladesh Securities and Exchange Commission (BSEC), is aimed at offering a secure and innovative investment opportunity while supporting the company’s expansion plans.
Founded in 2006, City Sugar Industries has grown to become one of Bangladesh’s top sugar refining companies. Headquartered in Narayanganj, the company specializes in producing its flagship product, Teer Sugar, and operates as a major industrial player in the country.
The company boasts advanced facilities with a daily refining capacity of 5,000 tonnes, enabling it to produce an impressive 1.5 million tonnes of refined sugar annually.
The proposed bond, which has a three-year term, is fully secured and designed to provide attractive returns to a wide range of investors, including both individuals and businesses across Bangladesh. The bond is tailored to meet the changing investment preferences of both institutional and retail investors, while also helping to strengthen the country’s capital market, the statement added.
Proceeds from the bond will be used to expand trade operations, improve cash flow management, and explore new financing options, reducing the company’s dependence on traditional bank loans. City Sugar Industries highlighted that the bond offers a promising investment opportunity for Bangladesh’s growing pool of investors, who are increasingly looking for secure and innovative financial products.
To support the bond issuance, City Sugar Industries signed an agreement with BRAC Bank on 17 February, appointing the bank as the bond’s arranger. 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 initiative is expected to mark a significant step in BRAC Bank’s efforts to drive market innovation and contribute to the development of Bangladesh’s corporate bond market. The bond issuance is also anticipated to create new investment opportunities, diversify financial products, and support the country’s economic growth, industrial development, and job creation, the statement concluded.
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Source : Chinimandi
