ICB Panel Recommends Six-Year Extension for Beximco Green Sukuk Principal Repayment

A working committee mandated by Bangladesh Bank has recommended extending the maturity of Beximco Ltd’s landmark Shariah-compliant green Sukuk by six years, following the issuer’s notification that it cannot repay investors’ principal when the bond matures in December 2026.

The 21-member committee, led by the Investment Corporation of Bangladesh (ICB) — the Sukuk trustee — has proposed a new maturity date of 2032 for the Tk3,000-crore instrument. The extension is requested due to Beximco’s ongoing financial strain, delays in two out of three Sukuk-funded projects, and the company’s inability to convert Sukuk units into shares as initially planned.

Under the original structure, up to 20% of the Sukuk was to be converted into Beximco shares annually over five years. Between 2022 and 2024, Tk1,800 crore was scheduled for conversion, but only Tk190 crore — 6.36% — was converted, leaving an outstanding principal of Tk2,809 crore. Market insiders indicate investors avoided conversion due to the Sukuk’s 9% semi-annual return.

A senior Beximco official, requesting anonymity, stated that in light of setbacks after 5 August 2024, repaying the principal by 2026 is impossible, though a six-year extension could allow full repayment.

The Sukuk financed two solar power projects — Teesta and Korotoa — and the expansion of Beximco’s textile division. Teesta Solar Park, operational since January 2023, has generated Tk1,693.31 crore in revenue up to October 2025, of which Tk1,044 crore has been paid to investors, and Tk248.39 crore spent on operations.

Korotoa Solar Park remains inactive following the July 2024 unrest, requiring Tk150 crore to restart. The textile unit, which received Tk800 crore, is partially operational due to raw material disruptions. The committee suggested that reviving Korotoa could reduce the extension to five years.

The 9% semi-annual profit will remain unchanged, and it is recommended to grant the SPV power of attorney over 650 acres of Teesta land, 130 acres of Korotoa land, and the six-storey textile building. Lease amendments are suggested to bring these lands under SPV management, as full repayment by 2026 is unfeasible.

KhaborwalaAJ