Star Adhesives to issue Tk50cr bond for business expansion

Star Adhesives Limited — a concern of the Partex Star Group — has decided to issue a convertible bond worth Tk50 crore to expand its business and refinance bank loans.

The bond will be unsecured, fully convertible, or redeemable for six years with a moratorium of one year, according to the company's disclosure on the Dhaka Stock Exchange (DSE) website on Sunday.

The bond will be issued at a floating interest rate on a semi-annual basis. A floating interest rate is one that changes periodically throughout the bond tenure.

The issuance of the bond is subject to approval by the shareholders through an online extraordinary general meeting (EGM) and by the Bangladesh Securities and Exchange Commission.

For this, the EGM has been scheduled on 24 September this year. Record date is 24 August.

Star Adhesives was formed in 2013, and listed on the SME platform of the bourses in 2022.

It manufactures different types of adhesives, lubricants, lacquer, spray paint, and silicon, as well as brake oil and grease. Adhesives are used as a backward linkage material for board, door, leather, footwear, plastic, household, and paint industries in the country.

The company recommended a 12.5% cash dividend to its shareholders for the 2021-22 fiscal year. Its earnings per share stood at Tk2.98 at the end of June 2023. On Sunday, its share price fell by 2.5% to Tk62.5 at the DSE.

According to industry insiders, the average growth of the adhesive industry in Bangladesh is 30%.

Star Adhesives, Pidilite Industries, RFL, Berger Paints, Fast Group, and Bengal Group are the major players in this sector.

Star Adhesives Ltd