Fibre Network Expansion

Summit to raise Tk1b from capital market

Shamim Jahangir

8th December, 2019 12:37:37 printer

Summit to raise Tk1b from capital  market

Summit Communication Limited got approval to raise Tk1billion from the capital market for expanding its network of fibre optical cable across the country.

For the purpose, the company, which is the leading nationwide telecommunication network operator, will issue Sharia-based non-convertible Mudaraba bond in the capital.

Bangladesh Telecommunication Regulatory Commission (BTRC) gave the approval in its recent board meeting.  

 The Mudaraba bond will have a face value of Tk10 million. Minimum subscription fee will be Tk50 million, Summit Communication Chief Executive Officer Arif Al Islam told daily sun.

Currently, the company has 44,000-kilometre fibre optic cable network, covering all the upazilas and about 1,000 union parishads in the country.

“We have a plan to cover at least 1,300 unions within a year using the fund,” he said.

The company has already started negotiating with the prospective investors for the work, he said.

“We have also plan to enhance our capacity in some potential upazilas too,” he said. 

According to the proposal of the company, the initial interest rate of the bond will be nine percent.

The interest rate will be determined subsequently by an average of interest rate of commercial Islamic Banks.

The interest rate, however, will not be less than eight percent or more than 10 percent.

The maturity period will be five years starting from the date of issuance, according to the proposal of the company.

Security Exchange Commission has responded to the proposal positively as BTRC sought opinion in this regard.  

Green Delta Capital Ltd will be manger for issuing the bond while LankaBangla Finance will be the trustee. Summit Holdings will be the corporate guarantor in this regard.

On April, 2019, country’s second largest mobile phone operator Robi Axiata also applied to the telecom regulator for raising Tk4 billion from the capital market by issuing  Shariah-based security bond.

The face value of each certificate was Tk100,000 and the BTRC was positive about the fundraising.