Photo : Collected
Leading local drugmaker Renata is going to sign an agreement with International Finance Corporation (IFC) to avail a foreign loan of $60 million.
The fund will be handed over to Renata as working capital and its tenure will be six years, according to a posting of the company on the website of the Dhaka Stock Exchange.
The drug manufacturer has recently received approval from its board of directors to go for the signing of the deal with the IFC, a member of the World Bank Group.
Renata's rose 4.53 percent to Tk 759.9 as of 1.50pm on Thursday.
Besides, this is the first foreign currency loan to be secured by the drug maker, amounting to over Tk700 crore at an exchange rate of Tk118 per dollar. The loan may be structured with a six-year term, including a one-year grace period.
According to a disclosure published on the stock exchange website on Thursday, the board of directors of Renata has already approved the signing of the agreement.
According to Renata's financials for July to March of the 2023-24 fiscal year, the company has Tk1,273 crore in loans and borrowings. However, officials said this amount may have risen to approximately Tk1,700 crore to date.
Last year, Renata decided to raise Tk850 crore through a bond and preference shares to pay off short-term debt owed to banks and non-bank financial institutions. Company officials described the move as strategic to mitigate the potential impact of rising interest rates.
Due to the lower profit, it recommended a lower dividend than the previous year. It declared a 62.5% cash dividend for the fiscal year 2022-23, which was 140% cash and 7% stock a year ago.
The company experienced an overall increase in the cost of raw materials by 20% to 25% year-on-year due to the inflation caused by dollar appreciation.
Messenger/Fameema
