Renata yesterday received approval from the Bangladesh Securities and Exchange Commission (BSEC) to raise Tk 350 crore in funds through the issuance of preference shares among pre-selected investors and institutions to repay some bank loans.

Preference shares, more commonly referred to as preferred stock, are shares of a company's stock with dividends that are paid out to shareholders before common stock dividends are issued, according to Investopedia.

The redeemable, cumulative, non-convertible and non-participative preference shares will have a 5-year tenure and the company plans on providing yearly dividends in the range of 9 percent to 10 percent, the BSEC said in a press release.

Shares of the listed drug maker dropped 1.17 percent yesterday from that on the day before to Tk 877.

Last January, Renata got the nod from the BSEC to raise Tk 660 crore in funds by issuing zero-coupon bonds to repay the loans.

A zero-coupon bond is a debt security that does not pay interest but initially trades at a deep discount, rendering profit at maturity when it is redeemed.

With the banking sector interest rate rising in the last couple of months, the company is trying to repay the loans through issuing bonds and preference shares, according to a top official of the company.

It will reduce the finance costs of the company, he added.

After a challenging fiscal year of 2022-23, the pharmaceutical company's performance started to make a turnaround in the current fiscal year.

Renata's consolidated earnings per share stood at Tk 7.68 in the second quarter of fiscal year 2023-24.

It was Tk 7.42 in the same quarter of 2022-23, according to Dhaka Stock Exchange.