Cut-off price of Best Holdings shares set at Tk35 each

The per share cut-off price of Best Holdings Limited, the operator of the five-star hotel Le Meridien in Dhaka's Nikunja 2 area, has been fixed at Tk35 through the electronic subscription system (ESS).

Qualified and institutional investors including mutual funds will buy 25% of the company's shares at the cut-off price.

Individual investors will be able to purchase the remaining shares at a 30% discounted price of Tk24 each.

The cut-off price is the price at which institutional investors have primary shares allocated for them in an initial public offering (IPO) under the book-building method.

The company's electronic bidding took place between 20 November and 23 November.

During this period, 97 institutional and eligible investors offered to buy the company's shares at a range of rates. Most bids were received for Tk35.

Earlier, on 10 October, the Bangladesh Securities and Exchange Commission (BSEC) allowed Best Holdings to raise Tk350 crore through an IPO under the book-building method from the capital market.

The company will use 50% of the fund or Tk176 crore for building construction and other civil works, 33% or Tk115.6 crore for repayment of existing liabilities, and around 13% for local machinery and equipment acquisition.

Best Holdings is in the process of raising fresh funds to build a resort in Bhaluka. The cost of the total project, which will offer world-class hospitality outside the capital, is Tk1,586.91 crore, as per the prospectus. In this project, the IPO and the company's own fund will contribute Tk755 crore and the rest will come from loans.

According to the audited financial report of June 2023, the earnings per share (EPS) of the company stood at Tk1.24 and the year-weighted average EPS at Tk0.95.

Its net asset value per share was Tk32.26, excluding revaluation, and Tk56.34 with revaluation.

Shanta Equity Limited and ICB Capital Management Ltd are working as the issue manager of the company for its IPO process.