Envoy Textile Limited – a 100% export-oriented denim manufacturing company in Bangladesh – has decided to issue 8.7 crore preference shares at a face value of Tk10. The company expects to raise Tk 87 crore through this, with the money raised going to finance an upcoming project expansion programme for the production of blended yarn and to repay a portion of high-cost borrowing.
On 5 May this year, it decided to set up a spinning project expansion unit at its existing factory premises in Bhaluka, Mymensingh. The cost of the expansion project is estimated at Tk 176.19 crore. The decision is now subject to the approval of the general member’s meeting, and consent from the Bangladesh Securities and Exchange Commission (BSEC).
According to Envoy Textiles’, the preference shares shall be fully redeemable cumulative non-convertible within five years. This means the shares will not be converted into equity shares but will be redeemed as preference shares only. As the per price sensitive information (PSI) of the company, the shares are to be redeemed at the principal amount by equal yearly installments commencing from the first year-end from the date of subscription.
The dividend will be paid semi-annually in arrears at the fixed rate. Envoy Textile was listed on the stock exchanges in 2012. Despite the shock from the Covid-19 pandemic, in the last 2020-21 fiscal year, Envoy Textiles’ revenue increased by 5.97% over the previous year. But its net profit fell by 65.43% due to adjustment in the provision of deferred tax on that year.