BSEC seeks details from Envoy Textiles about ADB loan

The Bangladesh Securities and Exchange Commission (BSEC) has sought detailed information from Envoy Textiles Limited – a leading denim manufacturer and exporter – about a loan facility of $11 million from the Asian Development Bank (ADB).

The board of the company earlier agreed to accept an offer from the regional bank for the long-term loan for the purchase and installation of spinning machinery and associated equipment for its second spinning unit (blended yarn project).

The tenure of the loan will be up to seven years, including a grace period of 1.5 years.

The loan is to be repaid in equal semi-annual instalments starting from the 1.5 years anniversary of the closing date of the facility.

ADB will disburse the loan subject to fulfilment of the conditions of the due diligence agreement and the approval of the Bangladesh Investment and Development Authority (Bida).

In a recent letter, BSEC sought to know the utilisation of all previous loans of the denim manufacturer showing their effects on the financial statements.

In addition, the commission asked for the copies of the bill of entry for all the settled letters of credit (LCs), the basis of the projection of the loan, its feasibility report, and the detailed breakups of the overall bank liabilities of the company.

In May this year, the stock market regulator approved the company to issue a Tk200 crore bond for buying machinery for its power plant and repaying loans.

Envoy Textiles – which was listed on the stock market in 2012 – is the first platinum-winning textile facility in the world as certified by the Leadership in Energy and Environmental Design (LEED).

As of 31 May 2022, sponsors and directors jointly held 57.93%, institutions 35.61%, foreign investors 0.06%, and the general public 6.40% shares of the company.
The last trading price of the company on the Dhaka Stock Exchange was Tk41.30 per share on Tuesday.