Star Adhesives gets approval to issue Tk50cr convertible bond

Star Adhesives Ltd, a concern of the Partex Star Group, has obtained consent from the Bangladesh Securities and Exchange Commission to issue a convertible bond worth Tk50 crore to expand its existing business and refinance bank loans, according to the stock exchange disclosure.

In August last year, the company decided to issue the bond.

The bond will be unsecured, fully convertible, or redeemable for six years with a moratorium of one year.

It will be issued at a floating interest rate on a semi-annual basis. A floating interest rate changes periodically throughout the bond tenure. Its face value per unit is Tk1 lakh.

Star Adhesives was formed in 2013, and listed on the SME platform of the bourses in 2022.

It manufactures different types of adhesives, lubricants, lacquer, spray paint, and silicon, as well as brake oil and grease. Adhesives are used as a backward linkage material for board, door, leather, footwear, plastic, household, and paint industries in the country.

In the fiscal 2022-23, the company recommended a 12.5% cash dividend to its shareholders.

During this year, the revenue of the company stood at Tk54.91 crore, which was Tk49.91 crore in the same period of the previous year.

Its profit after tax stood at Tk5.42 crore, up from Tk4.78 crore compared to the previous fiscal.

Its earnings per share stood at Tk2.71 and its net asset value per share was Tk15.42 at the end of June 2023.

Yesterday, its share price fell by 1.51% to Tk71.90 at the DSE.

As of 31 December 2023, the sponsors and directors of the company hold 37.50% of the company's shares, while institutional investors hold 22.20%, and general investors hold 40.3%.

According to industry insiders, the average growth of the adhesive industry in Bangladesh is 30%.

Star Adhesives, Pidilite Industries, RFL, Berger Paints, Fast Group, and Bengal Group are the major players in the sector.