LankaBangla Finance PLC, a non-banking financial institution, has received approval from its board to issue a zero-coupon bond worth Tk 200 crore.
The purpose of this fourth zero-coupon bond issuance is to generate liquidity that can be used to meet ongoing financing requirements, according to a statement made by the company on the Dhaka Stock Exchange.
A zero-coupon bond is a type of debt security that does not pay investors interest but trades at a substantial discount. Investors can earn a profit when the bond reaches maturity and is redeemed for its full face value.
LankaBangla Finance reported a significant decline in profit for the first quarter of the current financial year, with a year-on-year fall of 65% to Tk 8.08 crore. In the same period last year (January-March 2022), the company recorded a profit of Tk 23.17 crore.
The earnings per share (EPS) for January-March this year decreased to Tk 0.15, down from Tk 0.43 in 2022.
The company attributed the decrease in EPS to multiple factors, including the interest rate cap imposed by regulators since the second half of 2022, deteriorated asset quality due to the lingering effects of the Covid-19 pandemic, and reduced brokerage commission resulting from lower turnover.
LankaBangla Finance experienced a negative impact on its consolidated net operating cash flow per share (NOCFPS), which dropped to Tk 0.22 from Tk 3.49 during the period.
The consolidated net asset value per share (NAVPS) decreased from Tk 20.02 on December 31 last year to Tk 19.41 on March 31 this year.
The company explained that the decline in NOCFPS was caused by higher cash outflows resulting from deposit and asset settlements, while the decrease in NAVPS was due to the sale of shares of subsidiaries.
On the Dhaka Stock Exchange, LankaBangla Finance shares remained unchanged at Tk 26 at the end of trading on the 16th of May.