Beximco sukuk can now be converted into ordinary shares

Investors who have Beximco Green-Sukuk Al Istisna'a can convert 20 percent of the shukuk to ordinary shares of Beximco Ltd.

In a newspaper advertisement yesterday, Beximco Geen-Sukuk Trust, a special purpose vehicle, informed that the record date for the third-year conversion of the sukuk into Beximco Ltd shares has been set on December 22 this year.

A sukuk is an Islamic financial certificate, similar to a bond in Western finance. A special purpose vehicle is a subsidiary created by a parent company to isolate financial risk, according to investopedia.com.

The record date was fixed through a meeting between Beximco Geen-Sukuk Trust and the sukuk trustee, Investment Corporation of Bangladesh, last Wednesday.

At the end of July 2022, the Bangladesh Securities and Exchange Commission had set the floor price of every stock to halt the free fall of the market indices amid global economic uncertainties.

The floor price, which is the lowest price at which a share can be traded, was the average of the closing prices on July 28 of 2022 and the preceding four days.

Though it was later lifted for most companies, it is still in place at Tk 115.60 for Beximco Ltd shares.

This has led to apprehensions among investors that the Beximco Ltd share price may drop by a large margin once the floor price was lifted, according to market analysts.

In this situation, investors may not feel interested to convert their sukuk into the ordinary shares of the conglomerate, they added.

The conversion rate is 25 percent less than the weighted average market price of the ordinary shares of the 20 trading days at the Dhaka Stock Exchange (DSE) preceding the record date.

Investors seeking to avail the conversion facility are required to download the designated form from the associated website and submit their applications to the issue manager, that is Beximco Ltd, by email or mail by December 12.