your customers desert you,
RAB robs you,
commercial banks blacklist you,
a chor now means you
Yunus jhamtis you,
CEO quits on you,
VOiP confesses on you,
Newspapers start pointing at you,
your print ads clearly aren't helping you,
$300 million ignores you,
$200 million is oblivious to you,
$150 million overlooks you,
private placement laughs at you,
SEC axes you,
IPO fails you,
Citibank doesn't know what's wrong with you,
Citi is sleeping because of you,
Mamun Rashid's worst failure is you,
SIM tax only calls you,
high rates only apply to you,
world recession ONLY hits you,
... isn't it time you stop being you?
Yet another Grameenphone article, but you knew this from my poetry skills. But now things are very puzzling. The Tk 425 crore bond issue went through without any drama. I was certainly expecting some. First there are 10 investors. One, AK Khan, who sold his stake at AKtel phone to the Japanese NTT DoMoCo decided to invest a part of his USD $400 million bonanza into a competitor he learned to hate but, as it is evident now, also secretly admires. AK Khan is said to have invested Tk 150 crore into Grameenphone. He told Financial Express that it was because banks couldn't offer the 14% interest the GP bond was offering. AK Khan is the only man in Bangladesh with such a liquid and fortuitous position.
Let me remind you that GP couldn't raise $300 million and AK Khan managed to raise more without the help of Mamun Rashid's Citibank. AK Khan will be the man to keep track of this year. I think in our upcoming award show, he would be the Man of the Year. Now back to Grameenphone. The bond issue does have some interesting aspects. Let's start with the positive ones first.
- Inflation is going to rise further. 14% lock in means Grameenphone is thinking early and setting a debt cap on some of its loans
- Market is already in a cash (more like hysteria) crunch. A 14% bond now may be a smart move now if the situation becomes worse
- Banks are becoming increasingly suspicious of the market and GP. Citibank NA sinking means even a local bank thinks twice before investing. Most are overly cautious these days about their investments. Even in New York, LC's and international trades are looked into very deeply in case the corresponding bank collapses. GP may have managed to avoid this paranoia.
- A company of GP's size and status should be able to lock in a loan at 12% instead of a 14% bond. There is no need to issue bonds. It only makes the IPO more risky.
- A bond issue is highly suspicious. The Daily Star pointed out in 'quotes' that this bond is 'unsecured and unconvertible'. Meaning like bonds of many large and well-known companies they become junk because the companies won't honor the payments. A bank has some guarantee of a GP asset when it issues it a loan, but in this case AK Khan and banks can claim nothing.
- Fixed Deposit Rates may as well reach 14% with the inflation. Why do they need GP for anyway?
- GP has a new CEO, and like Anders Jensen, may claim he too had no knowledge about a bond being issued or where the excess cash came from. Thereby they are excused of the liabilities and will have an internal inquiry as to who is responsible for these nefarious activities.
As a side note, what was predicted here, is now getting national coverage. Commodity trade isn't what it used to be