FE REPORT |
Dec. 12, 2021, 10:21 a.m.
Index Agro Industries will repay the short-term loan with the proceeds of its IPO (initial public offering) although the issue has not been included in the list of areas in which this fund will be used.
The company obtained loan repayment approval at its annual general meeting (AGM) held on December 9, according to information posted on the Dhaka Stock Exchange (DSE) website.
The company will repay a short-term partial loan worth Tk 354.93 million with the proceeds of the IPO.
The issue of repayment of the short-term loan with the proceeds of the IPO was not mentioned in the company’s prospectus.
The company has raised capital of Tk500 million to construct buildings, purchase machinery and cover expenses related to the IPO.
In its disclosure, the company said the reason for repayment of the loan from the proceeds of the IPO was that it had filed an IPO application on October 27, 2016 and obtained regulatory consent on January 20. 2021.
The whole process lasted more than 4 years and in the meantime the company put in place the machinery, equipment and building and civil engineering works necessary for the expansion project through loans. banking and partly from its own sources, the statement said.
Index Agro Industries Company Secretary Abu Jafar Ali said there was no violation of loan repayment with the IPO proceeds as they received the consent of 51% of general shareholders who exercised the right to vote at the AGM.
“Our company can use the proceeds of the IPO in areas, which are not mentioned in the prospectus, given the option of just cause,” Ali said.
When asked, spokesman for securities regulator Mohammad Rezaul Karim said the regulator may consider a proposal to change the use of proceeds from the IPO based on shareholder approval and regulations. the board meeting.
The managing sponsors of Index Agro Industries hold 57.77% of the shares, the institutes 20.54% and the general shareholders 21.69% as of October 31, 2021.