A significant Taka 262 crore onshore bond was successfully closed by PRAN Agro Limited (PAL), a sister company of PRAN-RFL Group.
PRAN Agro will be able to finance its infrastructure expansion plans with the eight-year tenor bond. The only other investor in this bond is MetLife Bangladesh.
GuarantCo provides a portion of the bond’s guarantee. Due to its reputation for the transaction, it is a source of great pride that PRAN Agro was able to obtain financing from MetLife without any guarantee in some of this bond.
According to a news release, PRAN Agro will be able to finance the second phase of its growth plan to enhance its production capacity as a result of growing demand for its products in various export markets thanks to the income from the GuarantCo guaranteed bond.
The project calls for the establishment of additional factories as well as the acquisition of equipment for the production of noodles, confections, cooking oils, bakery goods, and other five product categories.
PRAN-RFL, one of Bangladesh’s biggest corporations engaged in agriculture and agro-processing, employs 1,45,000 people directly and works with 100,000 registered contract farmers.
Around 500 jobs, 60 percent of which will be for women, will be created at various levels of production, operations, and maintenance as a result of the deal, giving 240 new contract farmers a steady source of income.
On Thursday evening, a bond closing ceremony was held at a nearby hotel in Dhaka. Speakers included Elena Butarova, Senior Vice President of MetLife, Prof. Shibli Rubayat Ul Islam, Chairman of the Bangladesh Securities and Exchange Commission, Dr. Duncan Overfield, Deputy Development Director of the UK government, Ahsan Khan Chowdhury, Chairman and Chief Executive of the PRAN-RFL group, and Nishant Kumar, Managing Director and Head of Asia for GuarantCo.
About the bond, Uzma Chowdhury, Director (Corporate Finance) of PRAN-RFL group, said, “There is a huge demand for agro-processed food products in foreign markets manufactured by PRAN. This finance will help us to build up the required capacity to meet the increasing demand in different export markets all over the globe.”
Ala Ahmad, Chief Executive Officer at MetLife Bangladesh, said, “MetLife Bangladesh’s total investment in the country’s financial sector exceeds Taka 17,000 crore, and we continue to seek investment opportunities that strengthen our financial business capability in serving customers and contribute to the country’s overall economic development,”
“We are pleased to invest in this new PRAN Agro bond as part of our commitment to supporting the success of local businesses and communities,” added Ahmad.
Layth Al-Falaki, CEO of GuarantCo, said: “We are delighted to have closed our second transaction with PRAN Agro which will further develop the country’s bond market. In May 2021, we provided PRAN Agro with a guarantee of a Taka 2.1 billion ($25 million) onshore bond to attract domestic institutional capital from Bangladesh and support the company’s expansion plans,”
This is the second time that GuarantCo and MetLife have done business with PRAN Agro. Two years ago, PRAN Agro successfully issued the first internationally guaranteed bond in Bangladesh with a subscription from MetLife Bangladesh and a 100 percent guarantee from GuarantCo.
The bond was the first to be listed on the newly established Alternative Trading Board that Dhaka Stock Exchange had established. This second deal shows that using the Alternative Trading Board to trade corporate bonds on the secondary market is a viable option.
As a result, it is anticipated that these products will be imitated in the future, having a significant impact on the Bangladeshi corporate bond market’s efficiency.
High-ranking executives involved with the bond were also present, including Fakhrul Ahsan, Assistant General Manager (Corporate Finance) of the PRAN-RFL group, Ala Uddin, Chief Financial Officer of MetLife Bangladesh.
