Motorcycle manufacturer Runner Automobiles Limited is about to raise Tk100 crore from the capital market through an initial public offering (IPO).
Bangladesh Securities and Exchange Commission (BSEC) approved the cut off basis on which the company wants to determine the share price through book building, at a meeting presided over by chairman M Khairul Hossain on Tuesday.
With the participation of institutional investors, the selling price of the company’s share would be fixed through bidding.
Runner Automobiles wants to raise funds for expansion and repayment of bank loans, according to a statement.
Of the IPO proceeds, Tk63 crore will be spent on design and development of new products, machinery purchase and upgrading of existing models. Tk33 crore will be used to repay bank loans, and the remaining Tk4 crore will be IPO expenses.
The company plans to develop new models of two wheelers in the 110cc to 150cc range, and build on its existing 80cc to 100cc model motorcycles.
According to its financial statement ended on June 30 2017, the company’s Net Asset Value (NAV) per share stood at Tk41.94 (without revaluation), whereas the weighted average of Earning Per Share (EPS) was Tk3.31.
IDLC Investments Limited is the issue manager of the IPO.
Also at Tuesday’s meeting, the BSEC approved The City Bank Limited’s Non-convertible Floating Rate Subordinate bond, worth Tk700 crore.
The City Bank will issue bonds to strengthen the capital base and meet capital requirement under Tier-II only through private placement, subject to the approval from Bangladesh Bank.
The tenure of the bond will be seven years and the per unit price will be Tk1 crore. The units of the bond will be sold to banks, financial institutions, insurance companies, corporate bodies, and high net worth individuals through private placements.
EBL Investment Limited and City Bank Capital Resources Limited will jointly be the issue manager of the bond.