IFC to buy 5pc stake of City

Staff Correspondent

International Finance Corporation will invest Tk 131.77 crore in The City Bank to hold 5 per cent of equity of the bank after the bank issues fresh shares against the investment.
The Board of Directors has approved entering into shareholders agreement and subscription agreement among The City Bank Ltd and the IFC under which IFC will buy 46,560,231 fresh shares of City Bank with an issue price of Tk. 28.30 a share.
The total value of shares to be subscribed by IFC would be around Tk. 131.77 crore subject to obtaining approval of Bangladesh Bank, BSEC and other relevant Regulatory Authorities and as well as the shareholders to comply with the required regulatory requirements, said the City Bank.
The board of the bank has also approved convertible loan facilities from the IFC into common equity of the company after getting approval from the respective regulatory authorities.
The amount of loan would be US$ 20 million with interest rate of 2.75 per cent over 6 months LIBOR with maturity fees up to 3 years with a bullet payment at the end.
There would be a onetime front end fee of at least 1 per cent on the principal amount of the loan and a commitment fee of 0.50 per cent per annum on the undisbursed principal amount of the loan.
The loan could be converted into shares for IFC after maturity.
The City Bank managing director Sohail RK Hussain told New Age on Tuesday that the strategic relation between The City Bank Ltd and IFC would strengthen in the coming days due to the investment.
‘We think that it is a strategic investment of the IFC with the bank. The investment will play a role in strengthening the country’s infrastructural development. Our Bank has been working closely with IFC and Asian Development Bank for many days’, he said.
He said that the bank would use the convertible loan of the IFC in its offshore banking unit after which it (bank) would give the fund to different companies to promote the infrastructure.

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