Linde Bangladesh earns Tk910 crore from sale of welding electrodes business
The company paid Tk115 crore in capital gains tax at a 15% rate to the government
Linde Bangladesh, a multinational industrial gases producer, has earned Tk910.61 crore from the sale of its welding electrodes business to the ESAB Group.
According to the company's audited financial statement for January to July 2024, Linde Bangladesh earned the amount from the sale of its subsidiary, Linde Industries Pvt Limited, which operated the welding electrodes business.
From the proceeds, the company recovered its Tk138.29 crore investment in the subsidiary. After deducting this investment, the total capital gain amounted to Tk772.31 crore.
Keep updated, follow The Business Standard's Google news channel
Additionally, the company paid Tk115 crore in capital gains tax at a 15% rate to the government, as reflected in the audited report.
In May this year, Linde Bangladesh in a disclosure announced its decision to sell the company's major revenue-generating segment – the welding electrodes business – to the American-Swedish industrial company ESAB Group.
The company held 13.82 crore shares in its welding subsidiary, while its company secretary, Abu Mohammad Nisar, owned just one share. Based on the total number of shares, the subsidiary's shares were sold at approximately Tk65 each.
According to its disclosure, the firm transferred its holdings to ESAB Middle East FZE, and Abu Nisar transferred his share to Exelvia International Holdings, a subsidiary of ESAB Group.
According to the ESAB website, it is a world leader in welding and cutting equipment and consumables, with business operations in 140 countries and 26 manufacturing hubs across the globe.
Earlier, in October last year, Linde Bangladesh secured a High Court order to demerge its hard goods business to a wholly owned subsidiary, Linde Industries Pvt Ltd.
In 2023, Linde Bangladesh generated revenue of Tk270 crore from its welding electrodes business, compared to Tk142 crore from its gas business.
Fueled by significant capital gains, Linde Bangladesh's net profit surged 45-fold to Tk631.67 crore, with earnings per share (EPS) rising to Tk415.08 during the January-July period of this year.
Following the divestment of its subsidiary, the company paid a record-breaking 4,100% interim cash dividend to its shareholders, disbursing Tk410 per share.
In total, shareholders, including both sponsors and general investors, received Tk632 crore in dividends. Of this amount, sponsor-directors collected Tk374 crore, while general shareholders received Tk249 crore.
Linde Bangladesh was incorporated in 1973 and listed on the DSE in 1976. It started its welding electrode business in 1979 and set up the first electrode plant in 1995 at Rupganj.
Since then, it has regularly invested in this factory and set up three more lines to boost electrode production.
According to its financials for 2023, Linde Bangladesh made a profit of Tk52 crore and paid 1530% cash dividend to its shareholders.
