Agha Steel Industries Limited (PSX: AGHA) has decided to redeem its Rs. 5 billion Islamic bond before its maturity date.
According to a stock filing, the steelmaker is exercising the call option associated with the Agha Steel Industries Limited Sukuk Issue. As part of this process, AGHA is in the process of signing agreements with investors.
“We understand the significance of informing the Pakistan Stock Exchange (PSX) promptly and ensuring that all necessary procedures are followed diligently. Therefore, we assure you that we will provide the PSX with a timeline for the payment as early as possible,” the filing stated.
The company is principally engaged in the manufacturing and selling of steel bars, wire rods, and billets.
Pertinently, the Rs. 5 billion Sukuk featured an Rs. 1 billion green-shoe option, which allows the borrower to raise extra money at the same rate if public demand surpasses expectations.
The debt instrument was privately put before being listed on the stock exchange in 2019 for a six-year term, with a two-year grace period.
According to information communicated at the time, the steelmaker issued the Sukuk to pay off its current long-term debts and to fund a portion of the costs involved with the BMR (balance, modernization, and replacement) and commissioning of a new rolling mill unit.
The principal tranche payable in April 2023 remained unpaid and should be included in the early repayment amount scheduled to be resolved through AGHA’s latest call option.
