The SEC also approves Banglalion's proposal to issue zero coupon bonds
The Securities and Exchange Commission yesterday approved initial public offering (IPO) prospectus of Argon Denims Ltd, which will raise Tk 132 crore from public.
The approval came at a meeting of the stockmarket regulator with its Chairman M Khairul Hossain in the chair.
Using a fixed-price method, Argon Denims will float three crore ordinary shares of Tk 10 each at an offer price of Tk 44, including a premium of Tk 34, the SEC said in a statement.
The company will use the IPO proceeds to repay its bank loans and use in project expansion.
The company's earnings per share is Tk 5.46, according to its 2011 financial statements.
LankaBangla Investments Ltd is the issue manager of Argon Denims' IPO.
Argon Denims, a subsidiary of Evince Group, will be the 26th company in the textile sector to be listed on the bourse.
At yesterday's meeting, the SEC also approved Banglalion Communications' proposal to issue 10 percent convertible zero coupon bonds to raise Tk 130 crore from public through private placement.
The WiMax data and telecoms service provider will use the fund in its 'broadband wireless access project'.
A zero coupon bond is a debt instrument that has no periodic interest. At maturity, the face value of the bond is repaid or redeemed. The 10 percent convertible zero coupon bond of Banglalion means that 10 percent or Tk 13 crore will be converted into ordinary shares after the maturity period.
The maturity period of the bond will be three to seven years with 15 percent yield to maturity.
The trustee and issue manager of the bond is Industrial and Infrastructure Development Finance Company Ltd.
The market regulator also decided to instruct the institutions concerned to implement the recommendations made by a government committee on compensating the retail investors who lost money to last year's downswings.
Earlier, the committee singled out 9.33 lakh small investors who will get 20 percent IPO quota under the stock compensation package.
According to the package, the affected small investors will also get a 50 percent waiver of interest on loans. The interest to be waived must be accrued within the 2011 calendar year or fiscal 2011-12.
The government also gave the small investors scope to pay the remaining 50 percent of the interest through quarterly instalments in three years.
At yesterday's meeting the stockmarket watchdog also fined issue manager, auditor and valuer of Apollo Ispat Complex Ltd for providing incorrect information in the IPO prospectus.
The SEC imposed Tk 1 lakh fine each on ICB Capital Management Ltd, the issue manager, and Ms Zoha Zaman Kabir Rashid and Co Ltd, the auditor, and Tk 2 lakh fine on Ms Mosih Muhit and Co, the valuer.
The SEC also approved amendments to corporate governance guideline, which is now compulsory for listed firms to comply with.
Previously, the guideline was not mandatory, and it would allow a listed company to get away with non-compliance only by explaining its failure to go by it.
At least a fourth of directors must be independent directors on a company's board of directors, according to the new guideline.