KPCL plans merger of two subsidiaries - Share market analysis of dhaka stock exchange, Bangladesh

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06 November, 2014 10:12 AM Source: Dhaka Tribune

Khulna Power Company Ltd (KPCL), the country’s first independent power producer, plans to merge with its two subsidiary companies – Khulna Power Company Unit II Ltd and Khanjahan Ali Power Company Ltd.

“This amalgamation will boost the company to grow its business and better utilize its assets and thereby maximising profits,” said the company in a statement yesterday.

Before merging, the companies need to take approval from regulator and the court. The detail about transfer of shares from transferor to the transferee companies has not been disclosed yet.

The company will apply to the High Court Division of the Supreme Court, for approval of the amalgamation. Its Extraordinary General Meeting will be held under the supervision of the court soon for shareholder’s permission.

Established under the private sector power generation policy, it is in operation for the last 16 years. It owns and operates a 110 mega watt barge mounted power plant that commenced operation in October 1998 in Khulna and supplies electricity to the national grid.

Local shareholders hold 100% ownership of the company. KPCL project was initially financed by the IFC and the sponsors’ equity with a debt-to-equity ratio of 54:46.

Initially, the company’s shareholders were Coastal Power Company (later Coastal was merged with El Paso Corporation, USA) through its direct wholly-owned subsidiary El Paso Khulna Power ApS, Summit Industrial and Mercantile Corporation, United Enterprises and Co Ltd. (Bangladesh) and Wärtsilä Development and Financial Services (Asia).

The plant consumes about 600 metric tons of heavy fuel oil daily to generate 110 MW power by the 19 generators on the two barges located in Khalishpur, Khulna.

Yesterday at the Dhaka Stock Exchange, the listed company KPCL share prices fell more than 2%. The company was also the third largest traded stocks at the bourse.

According to the company’s latest financial statement, its third quarter (July to September) profit this year stood at Tk56.4 crore, a rise of more than 26% a year earlier.

- Kayes Sohel


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