Best Holdings to hold roadshow on 20 Oct

Best Holdings Limited – the parent company of hotel Le Méridien Dhaka – is going to arrange a roadshow on 20 October to raise around Tk350 crore from the stock market through an initial public offering (IPO). 

The company will offload 10% of its total number of shares for the IPO under the book-building method. Eligible investors will attend and exchange their views at the roadshow. 

For its IPO, the company has appointed ICB Capital Management Limited and Shanta Equity Limited as issue managers, and Prime Finance Capital Management Limited as the registrar.

Best Holdings Company Secretary Md Abul Kalam Azad told The Business Standard, "Out of the IPO fund, around 30% will be used to repay the high-cost debt and the rest will be spent for the Valuka resort project, which will be operated by the Marriott International."

Best Holdings, which is also a subsidiary of the Metro Group, was incorporated in 2006 and started business in 2009. Currently, its paid-up capital is Tk925 crore, according to the IPO prospectus.

Best Hotels Limited, a subsidiary of Best Holdings, is constructing a five-star hotel in Mawna, Gazipur which is expected to begin operation in 2023.

According to sources, the revenue of Best Holdings was around Tk260 crore at the end of FY22. Its net profit was Tk100 crore and earnings per share was Tk1.10.

Its net asset value per share stood at Tk55 at the end of the last fiscal year.

In November 2020, Best Holdings applied to the Bangladesh Securities and Exchange Commission (BSEC), seeking approval for issuing 4.35 crore shares at Tk65 each to raise Tk283 crore under the direct listing method, despite the fact that securities rules do not permit direct listing for private companies.

In the prospectus, Best Holdings mentioned Race Portfolio and Issue Management Company Limited and ICB Capital Management Limited as the issue managers of the company.

However, the ICB in a statement declined being the issue manager of Best Holdings.

In December 2020, the BSEC, after getting a finance ministry instruction, ordered the Dhaka Stock Exchange to stop the procedure of direct listing of the company following a spate of criticisms against such a move.

Sponsors of Best Holdings hold 52.01% and private placement shareholders own 47.99% shares. Among the private placement shareholders, four state-owned banks own 29.58% of the company's paid-up capital, according to the previous direct listing filings.

Sonali Bank holds 8.83%, Janata Bank 8.83%, Agrani Bank 6.62%, and Rupali Bank 5.3% of the company's paid-up capital.

The banks bought 25.75 crore shares for Tk1,675 crore, or Tk65 each with a face value of Tk10.

State-run Investment Corporation of Bangladesh also invested Tk150 crore in Best Holdings.

In 2019, Best Holdings issued a bond worth Tk1,200 crore for paying off a massive loan, which was used to build Le Méridien Dhaka.