Summit to raise Tk 100cr through Mudaraba bond

The Daily Star, August 22, 2019

Summit Communication plans to raise Tk 100 crore from the local market by issuing a Shariah-based non-convertible Mudaraba bond to expand its fibre optic cable network up to the remotest part of the country.

Each certificate will have a face value of Tk 1 crore and the minimum subscription will be Tk 5 crore, the company’s CEO Arif Al Islam told The Daily Star.

The leading nationwide telecommunication transmission network operator currently has 44,000-kilometre fibre optic cable, covering all the upazilas and about 1,000 union parishads.

“We have a plan to bring at least another 500 union parishads under our coverage within the next six to nine months with this money,” said Islam said.

It will also expand the capacity in some of the high demand areas, he added.

According to the proposal of the company, the initial interest rate of the bond will be 9 percent and subsequently the rate of interest will be determined by an average of interest rate of deposits of commercial Islamic banks as published on the Bangladesh Bank’s website plus 3 percent margin.

The interest rate, however, will not be less than 8 percent or more than 10 percent.

The maturity period will be five years starting on the issue date, according to a letter Summit recently sent to the Bangladesh Telecommunication Regulatory Commission (BTRC) seeking permission for it.

The BTRC has decided to seek comment from the Bangladesh Securities and Exchange Commission on whether there is any legal complexity to the issuance of the bond.

Green Delta Capital Ltd will be the issue manager of the bond while LankaBangla Finance will be the trustee. Summit Holdings will be the corporate guarantor.

Earlier in April this year, country’s second largest mobile operator Robi applied to the telecom regulator to raise Tk 400 crore from the local market by issuing a Shariah-based security bond. The face value of each certificate was Tk 1 lakh and the BTRC was positive about the fundraising.

In 2015, Banglalink sold $300 million five-year notes—the first dollar-denominated bonds from Bangladesh—with an aim to boost its business.

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