The leading denim exporter of the country, Envoy Textiles Ltd., has decided to issue a non-convertible zero-coupon bond worth Taka 200 crore at a coupon rate of 6.5 per cent to 7.5 per cent even if of the amount, Envoy will, reportedly, use Taka 168.4 crore to finance its new gas-based 19MW captive power plant project and to repay some bank loans.
Media reports maintained this citing the concerned officials.
“ …at present we have to pay an average interest rate of 9 per cent against bank loans, and the bond proceeds would allow us to save interest cost by 200 basis points…,” reportedly, maintained M. Saiful Islam Chowdhury, the Company Secretary of Envoy while adding both the fund utilisation plans would help Envoy save costs even if the company is currently using a 10MW electricity connection by the Rural Electrification Board (REB) along with its diesel-based generators that can produce 4MW electricity, but the denim manufacturer is planning to ditch both the REB connection because its quality is not up to the mark to support Envoy’s units, and the generators because of an increase in their operating costs while the new gas-based power plant would help reduce power costs by around one-third, as per the Company Secretary.
