Intraco Refueling Station to merge with subsidiaries for tax benefit
Intraco Refueling Station – which is listed on the capital market – has decided to merge with its five subsidiaries to avail corporate tax benefits and reduce administrative expenses.
Currently, listed and non-listed companies pay corporate tax at 20% and 27.50 respectively.
To get approval from its shareholders, the compressed natural gas (CNG) refuelling service provider in the country, a sister concern of Intraco Group, has arranged an extraordinary general meeting (EGM) on 23 August.
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Intraco Refueling Station holds more than 95% stake in the five companies – Good CNG Refueling Station; M Hye & Co CNG Refueling Station; Nessa and Sons; Absar & Elias Enterprises Ltd; and Intraco Automobiles.
The company disclosed its merger proposal on stock exchanges on Monday, but its shares gained 45% in the last six days with each share price rising to Tk29.5 on Monday from Tk20.3 on 27 June.
Intraco Refueling Station also informed that it will issue a convertible bond worth Tk50 crore for business expansion.
According to the company, it has invested Tk10.48 crore in these five companies.
The total paid-up capital of the five subsidiaries stood at Tk11.04 crore, and up to March of fiscal 2021-2022, they made a profit of Tk2.51 crore.
According to company sources, as the subsidiaries are non-listed and different entities, they have to pay corporate tax at a regular rate, which is higher than the listed firms.
Also, the companies will run under the parent firm's management, which will decrease administrative and other expenses.
Finally, the move for a merger will help the parent company to be more profitable, expects the company.
Recently, the Bangladesh Securities and Exchange Commission (BSEC) has decided to appoint a special auditor at Intraco Refueling Station to review the utilisation status of its initial public offering (IPO) proceeds.
The auditor will also review the financial statements of the company for the last two years.
In fiscal 2020-21, its revenue grew 7% to Tk95.58 crore, and profit rose 50% to Tk7.45 crore.
The board of the company decided to pay 2% cash and 8% stock dividends to its shareholders for FY21.
In the July-March period of fiscal 2021-22, its revenue rose to Tk48.32 crore, an increase from Tk39.08 crore in the same period of the previous year.
During the period, its net profit stood at Tk4.81 crore, up from Tk4.08 crore in the same period of the previous fiscal year.
