Mostafa Metal to issue Tk18cr bond for business expansion
Mostafa Metal Industries, a listed firm on the SME board, has decided to issue a non-convertible bond worth Tk18 crore for the business expansion.
The manufacturer of all kinds of Polyvinyl Chloride (PVC) and wood plastic composite (WPC) doors for the local market will issue the zero-coupon bond through private placement at an 11% coupon rate.
The price for each of the 36 total lots of the bond units will be Tk50 lakh, according to a disclosure on the Dhaka Stock Exchange (DSE).
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In 2021, the SME firm went public to raise Tk11 crore from the stock market through a qualified investor offer (QIO) and got listed on the SME board.
Mostafa Metal needed the fund for its business expansion.
Now, the company says, its business is growing rapidly, and its management has decided to expand the current production capacity to meet the growing demand.
Md Nazmul Islam, company secretary of Mostafa Metal Industries, told The Business Standard, "To increase the production capacity and meet the growing demand for its products, the company needs working capital."
"After issuing a bond, the company will raise funds, and they will be invested in business expansion to increase capacity," he added.
He had earlier said, "We used to sell our products in due time, but now we are selling products with advance payment. This is mainly due to the good demand for the products at present."
According to its financials, despite around 1% growth in revenue, Mostafa Metal has reported an 8% fall in profit in the fiscal 2021-22 compared to the previous fiscal year.
In FY22, its revenue rose to Tk42.14 crore and its net profit declined to Tk5.03 crore.
The paid-up capital of the company is TK48.85 crore. On Thursday, its shares closed at Tk13.40 each.
Out of the total shares, sponsor-directors hold 31.15%, institutional investors 29.02% and the general public 39.83% as on December 2022.
