Power Grid approved to issue 250cr preference shares to govt
The sole state-owned power transmission company previously issued 764.11 crore irredeemable and noncumulative preference shares in favour of the Power Division secretary in line with the conversion of Tk7,641 crore share money deposits into shares
Power Grid Company of Bangladesh has secured the stock market regulator's nod to issue another 250.54 crore preference shares against the share money deposits taken from the government to continue its development work over the years.
The sole state-owned power transmission company previously issued 764.11 crore irredeemable and noncumulative preference shares in favour of the Power Division secretary in line with the conversion of Tk7,641 crore share money deposits into shares.
Also, Power Grid converted Tk402 crore into general shares at Tk20 each – a Tk10 face value and Tk10 premium.
The preference shares will not be considered while calculating earnings per share (EPS).
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Preference shares, more commonly referred to as preferred stock, are shares of a company's stock with dividends that are paid out to shareholders before common stock dividends are issued.
According to its annual report, the government provided Tk10,548 crore to Power Grid as a share money deposit till June 2023.
At the end of March 2024, the share money deposit of the company stood at Tk11,313 crore.
A share money deposit is the money paid in exchange for shares that have not been acquired yet.
In February 2020, the Financial Reporting Council issued a directive to convert share money deposits into the company's capital within six months.
In line with the directive, state firms like Power Grid, Titas, and Rupali Bank have been converting the deposits into preference shares.
In a press release today, BSEC said it has approved the proposal to issue 250.54 crore preference shares as per the company's application.
Shares will be issued at Tk10 each, and they will not be part of paid-up capital, reads the press release.
Now, Power Grid is the largest company by market value on Dhaka and Chattogram bourses.
On 13 May, both the DSE and the Chittagong Stock Exchange (CSE) indicated that Power Grid's market value had surged to over Tk37,500 crore, up from less than Tk3,000 crore in the previous session.
This increase was due to an around 11-fold rise in its paid-up capital, from Tk712 crore to Tk8,555 crore, as the company issued fresh shares to the government against its significant share money deposit.
