Anwar Galvanizing to take land lease to expand capacity

• Board decided to execute a land deal with Fresco Steel Mills Ltd 
• The tenure of the lease will be for 17 years
• Sheds for godown, steel structure of concrete floors will be constructed, and heavy machines will be installed 

Anwar Galvanizing – a sister concern of Anwar Group – is set to take the lease of around five bighas of land from Fresco Steel Mills to expand its production capacity.

In a meeting on 30 January, the board decided to execute the lease deed, according to a disclosure that says the tenure of the lease will be 17 years with a security deposit of Tk1 crore.

The manufacturer of galvanised iron-pipe (GI) fittings will construct sheds for godowns, steel structures with concrete floors, as well as heavy machinery.

Company Secretary Tauhidul Islam told The Business Standard, "The existing factory of the company is very small; that's why the management has decided to expand its capacity."

"The leasehold land is near our existing factory, which will help expand the factory capacity as per plan," he added.

He, however, declined to elaborate on their investment plans and did not provide further details.

According to its July-December 2023 financials, its revenue declined 3% year-on-year to Tk32.25 crore, while net profit increased 30% to Tk6.60 crore.

The statement credited its reduction in manufacturing costs with an increase in the gross profit margin.

In the fiscal 2022-23, Anwar Galvanizing reported a 1.87% growth in revenue, while profit dipped 69% compared to a year ago.

Its revenue stood at Tk79.79 crore and profit was Tk5.95 crore in FY23, which was Tk72.43 crore and Tk19.34 crore, respectively, in the previous year.

The company's board of directors has recommended a 10% cash dividend to its shareholders for FY23, which is subject to their approval at the annual general meeting (AGM) scheduled on 4 February 2024.

Planned to issue bond for expansion

Anwar Galvanizing had decided to issue a bond worth Tk50 crore for business expansion.

It had been decided that 90% of the bond units will be converted into shares of Anwar Galvanizing, while the rest will remain as non-convertible redeemable coupon-bearing bond units with a tenure of five years.

The coupon rate of the bond will range from 9% to 11% per year and will be offered semi-annually.

The issuance of the bond is subject to approval from the Bangladesh Securities and Exchange Commission and other relevant regulatory bodies, the disclosure reads.

The bond will be offered to potential investors, including banks, non-bank financial institutions, insurance companies, corporate entities, high-net-worth individuals, existing shareholders, and the general public.