Dhaka, Bangladesh (BBN)-The board of directors has approved entering into shareholders agreement and subscription agreement among The City Bank Ltd and International Finance Corporation’s (IFC), according to an official disclosure on Tuesday.
Based on the agreements, IFC will invest in the City Bank’s equity shares to hold 5.0 percent of outstanding number of bank’s common equity through issuance of fresh equity with 46,560,231 shares with an issue price of each share of BDT 28.30 (BDT 18.30 premium with a face value of BDT 10 each), said the disclosure.
The total value of shares to be subscribed by IFC would be BDT 1,317,654,537, subject to obtaining approval of Bangladesh Bank (BB), Bangladesh Securities and Exchange Commission (BSEC) and other relevant regulatory authorities and as well as the shareholders to comply with the required regulatory requirements, it added.
The board has also approved convertible loan facilities from IFC into common equity of the company after getting approval from the respective regulatory authorities.
The amount of loan would be USD $ 20,000,000 with interest rate of 2.75 per cent over six months LIBOR (the final loan spread will depend on IFC’s assessment of the investment risk and other factors) with maturities fees up to three years with a bullet payment at the end.
There would be a onetime front end fee of at least 1.0 per cent on the principal amount of the loan and a commitment fee of 0.50 per cent per annum on the undisbursed principal amount of the loan.
The conversion features would be as follows:
Conversion Option: IFC may convert all or portion of the outstanding principal balance of the loan into common shares of the borrower at any time during the conversion period following the delivery of a conversion notice by IFC to the bank.
Conversion Period: it means the period commencing on the date that is 1 year from the date of the loan agreement and terminating upon the full repayment of the loan in accordance with the terms of the loan agreement.
Conversion Price: The conversion strike price is BDT 28.30 per share and the shareholders’ rights in line with equity investment.
For this the board of directors of the company has also decided to amend relevant provisions of the Memorandum and Articles of associations subject to approval of the relevant regulatory authorities and shareholders.
The date of extraordinary general meeting (EGM) will be held on March 24.
The record date for EGM is on March 2.