News and Events
(Thimphu, Bhutan, May 1, 2025)Abridged Prospectus for the Gelephu Mindfulness City Nation Building Bond (GNBB)
A. General Information
| Name of the Company | Gelephu Investment and Development Corporation (GIDC) |
| Registered Office | 346 Chhimchukha Zur Lam 2 NW, Motithang, Thimphu: Bhutan |
| Name of the auditor and banker | Bank of Bhutan (BoB), Bhutan National Bank (BNB), Royal Insurance Corporation of Bhutan Limited (RICBL), Bhutan Development Bank Limited (BDBL) & DK Bank. |
B. GIDC hereby issues Corporate Bond with the following terms and conditions:
| 1. (Name and Contact Number) Underwriter/Broker | Bank of Bhutan Limited (BOBL), Bhutan National Bank (BNB), Royal Insurance Corporation of Bhutan Limited (RICBL), Bhutan Development Bank Limited (BDBL) & DK Bank. |
| 2. Tenure | Ten (10) years |
| 3. Face value per unit | Nu. 1,000 |
| 4. Total number of units offered | Nu 2,000,000 |
| 5. Total Value of bond | Nu. 2,000,000,000 |
| 6. Minimum bid size | 10 units for individuals |
| 7. Mode of payment | Cash/Cheque/Draft/Others |
| 8. Coupon rate | 10.00% per annum from the date of allotment |
| 9. Coupon payments | Annually |
| 10. Listing | The bonds will be listed with Royal Securities Exchange of Bhutan within 15 working days from the date of the allotment. The bond can also be accessed via National Digital Identity (NDI). |
| 11. Opening date | 02/05/2025 |
| 12. Closing date | 31/05/2025 |
| 13. Allotment date | 03/06/2025 |
| 14. Tax | The coupon amount will be exempted for the purpose of Personal Income Tax (PIT) |
C. Utilization of the fund
The funds raised from the GNBB will be utilized for the development of the international airport in Gelephu Mindfulness City. With an estimated initial cost of USD 500 million, the airport will establish Gelephu Mindfulness City as a gateway to South Asia and Southeast Asia.
D. Risk Factors
Investing in the GNBB involves several risks, including:
- Bhutan-Related Risks:
- Limited financing for GMC development projects may affect returns on the GNBB.
- Destabilizing events in other parts of the world could impact Bhutan's economy.
- GNBB-Related Risks:
- Counterparty risk: There is a potential risk that the Issuer may default on their contractual obligation. The GNBB is issued by GIDC.
- Market risk: The value of the GNBB may fluctuate with economic conditions.
- Liquidity risk: The investors may not be able to sell GNBB readily or at prices that will enable investors to realize the anticipated yield. Investors should not purchase GNBB unless you understand and can bear the risk that the GNBB may not be readily saleable, that the value of such GNBB will fluctuate over time, that such fluctuations may be significant and that you may lose all or a substantial portion of the purchase price of GNBB.
- Rating risk: GNBB is unrated, with no independent credit assessment. The GNBB is not rated by any credit rating agency. Unrated bonds have not undergone an independent credit assessment, which means there is no formal evaluation of the Issuer's ability to meet its financial obligations, including interest payments and principal repayment.
E. Basis of Allotment
The allotment of GNBB shall be done on "equal allocation method" basis. The un-allotted amount shall be refunded within 30 working days without interest thereon.
F. Lock-in Period
There will be a lock-in period of five (5) years, during which neither the bond issuer nor the bondholder shall have the right to redeem the bonds.
G. Redemption
Redemption by the bond issuer will only occur at the end of the bond tenure.
H. Private Placement
The allotment shall be through public offerings to Bhutanese individual investors.
I. Condition for pre-mature redemption
Premature redemption of the bond is not permitted. Following registration with the RSEBL, investors may trade the bond in the secondary market, subject to the condition that such trading is only allowed after the completion of one year from the date of allocation. Additionally, institutional investors shall be restricted from purchasing the bond in the secondary market.
J. Eligibility
Only Bhutanese individuals residing in Bhutan are eligible for subscription of these bonds.
K. Subscription
Investors can access the bond through two distribution channels: broker services OR direct subscription on the Royal Securities Exchange of Bhutan Limited website: https://rsebl.org.bt/bond.
Our Distribution Partners
We have onboarded the following brokers to support the distribution of the GNBB.
- Bank of Bhutan: +975 77789206
- Bhutan National Bank: +975 17434138
- Royal Insurance Corporation of Bhutan Limited: +975 77487283
- Bhutan Development Bank Limited: +975 17455833
- DK Bank: +975 17111010
L. Financial Highlights
Since GIDC is unable to provide its financial highlights for the past three years, its credibility, as required under the Bond Regulations, is be backed by a guarantee from GMCA. This guarantee will reinforce GIDC's financial standing, ensuring confidence among stakeholders and compliance with regulatory requirements.
M. Name and contact number of the company secretary
Ms. Kesang Wangmo+975 77845894
N. Declaration
We hereby declare that we have complied with the relevant provisions of the Companies Act, the regulations of Royal Securities Exchange of Bhutan, and all prevailing rules and regulations. Furthermore, no statements made in the prospectus contradict the provisions of the Companies Act.
For more detail
Download document (.pdf)- Ends -